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SpaceX IPO: Updates and Commentary

karee.venema@futurenet.com (Karee Venema) — Thu, 11 Jun 2026 13:05:04 +0000

The market for initial public offerings (IPOs) has struggled to see the same enthusiasm it had in 2021, when 397 offerings raised $142.4 billion in proceeds. While 2026 has gotten off to a slow start — 71 IPOs have raised $35.7 billion — a string of highly anticipated offerings is signaling renewed excitement for IPOs.

First up was the SpaceX IPO, Elon Musk's space and exploration company going public in the largest offering ever and SPCX stock now trading on the Nasdaq.

The Kiplinger team is reported on the SpaceX IPO, bringing you the news and our expert analysis of what this means for the stock market, the economy and your money. Scroll for the updates.

Should You Buy SPCX Stock? | Hot Upcoming IPOs to Watch | The Space Sector Prepares to Blast Off

What is SpaceX?

Elon Musk founded SpaceX in 2002, intending to lower costs for space launches and eventually build a livable colony on Mars. The company had its first successful space launch in 2008 and has since had more than 650 total launches. It also wants to build data centers in space.

"A key to its success has been a relentless focus on innovation," writes Kiplinger contributor Tom Taulli in his feature on the hottest upcoming IPOs to watch for. "The company's breakthroughs include reusable orbital rockets, which have greatly reduced the costs of space flights; vertical rocket landings; and onboard autonomous systems."

In 2015, SpaceX moved to diversify its revenue stream with Starlink, a satellite internet project that today provides coverage to roughly 10 million customers across 160 countries and territories. It also has contracts with the U.S. Department of Defense to provide satellite service through its Starshield segment to government and military organizations, including with Ukraine during its war with Russia.

Geopolitical conflicts are increasing the demand for satellites, and the conflict in the Middle East shows "how space tech is crucial for missile warning and tracking, communications, surveillance, drone and vehicle connectivity, and more," writes John Miley, senior associate editor at The Kiplinger Letter.

SpaceX also bought xAI, Musk's artificial intelligence (AI) company that owns X (formerly Twitter), in February 2026 in an all-stock deal valued at roughly $250 billion. In May, Musk announced that xAI is fully absorbed by SpaceX and will rebrand as SpaceXAI.

According to its S-1 filing, which became publicly available on May 20, SpaceX had revenue of $4.7 billion in the three months ended March 31. It also incurred a loss from operations of $1.9 billion and had adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $1.1 billion.

In 2025, the company's revenue totaled $18.67 billion, while adjusted EBITDA arrived at $6.58 billion.

SpaceX is poised to benefit from surging growth in the global space economy, which is expected to reach $1 trillion by 2034, according to Novaspace, up from $626 billion in 2025. "The U.S., led by SpaceX launching 85% of spacecraft into orbit and its Starlink Internet service, reaps most of the business," says Miley.

- Karee Venema

Space is hard

One thing I've heard over and over again from space analysts, investors and executives: "Space is hard."

The industry mantra may seem like a tired cliché or even an excuse for mishaps and bad business decisions, but it's true. The incredibly capital-intensive industry requires extraordinary feats of engineering and technology. Things can go wrong suddenly, as seen in the recent explosion during a Blue Origin engine test. Funding could dry up as timelines get extended and revenue is slow to appear.

So, when looking at the space sector, keep in mind that delays are common and outright failures happen. Or, to echo another industry cliché, it's literally rocket science.

- John Miley

How to buy the SpaceX IPO

Allocations of IPOs — especially hot ones — typically go to institutions and wealthy investors. This is a way for investment banks and brokerages to reward their best clients. This usually means that allocations for retail investors are small, say 5% to 10% of the number of shares issued.

But with the upcoming SpaceX IPO, the script will be different. The company has set the allocation up to 30%, or about $23 billion in market value.

Here are the brokerages that have been assigned to distribute the shares:

Each firm has its own requirements. Yet there is a general process for retail investors to buy SpaceX shares.

Investor questionnaire: You will need to fill out a form that gauges whether you meet the firm's eligibility criteria. This might include an account minimum, investor experience and risk tolerance.
Offer: The firm will provide access to SpaceX's prospectus, which is the disclosure document for the IPO. You will then submit an indication of interest or conditional offer — that is, the number of shares you want to buy. This is for a price range. When the IPO is priced, which typically happens the night before the public offering, you will confirm the indication of interest.
Allocation: On the day of the IPO, the firm will notify you if you received shares.

Keep in mind that you are not guaranteed to receive shares. If there is substantial demand for the offering, there may not be enough for the retail investors who submitted their indications of interest. Furthermore, each firm will have its own procedures for allocations. For example, if an investor "flipped" a prior IPO, which is when they sold shares soon after the offering, they may not get an allocation.

Then again, some firms have fairly straightforward approaches. In the case of Robinhood, it's solely based on a random allocation.

- Tom Taulli

On June 3, SpaceX updated its S-1 filing to show that it priced its offering at $135 per share. Based on the roughly 555.6 million Class A shares it is selling, SpaceX will raise $75 billion, easily making it the biggest U.S. IPO ever. Chinese tech conglomerate Alibaba Group Holding (BABA) currently holds that title, having raised $4.6 billion in its March 2021 offering.

Most companies offer a price range for their offering in the week or so leading up to their IPO and then set a final price the night before their stock begins trading on public markets. And SpaceX could change its price later today, but it's widely expected that the $ 135-per-share price set by CEO Elon Musk last week will be the final offer.

There are likely several reasons for this, including Musk's likely desire to take SpaceX public on his terms.

Additionally, there's massive demand for SpaceX shares. According to some estimates, the IPO is 3.3 times oversubscribed, meaning demand for SPCX stock has more than tripled the number of shares available for purchase. This suggests that shares could see a big first-day pop given the supply-demand imbalance.

- Karee Venema

The SpaceX IPO is increasing excitement around the space industry and consolidation could be coming

Similar to the AI industry, there's immense excitement about space, supercharged by SpaceX's IPO. That's led to venture capitalists betting big on a growing number of start-ups.

Generally speaking, there are too many companies, even as the overall global market is poised to grow. Look for a wave of consolidation as things shake out over the next three to five years.

SpaceX's dominance could be a driving force in this trend as it aggressively seeks to control both traditional and new markets. When SpaceX decides to get involved in a particular segment of space, its competitors get nervous.

- John Miley

SpaceX will not be fast-tracked into the S&P 500

Several exchange operators have recently changed their rules to fast-track inclusion for mega-cap IPOs, including SpaceX.

Nasdaq (NDAQ), for instance, unveiled new "fast entry" rules in early May that allows it the ability to accelerate the time frame in which large companies are added to its Nasdaq-100 Index. Previous rules required that a company wait up to a year before being included in the index, but its new requirements lower the eligibility for inclusion to just 15 days.

"That's important for a number of reasons," explains Kiplinger contributor Dan Burrows in his feature on the Nasdaq's new fast entry rules. "For one thing, the delay stops hedge funds from front-running ETF investors. Under the new rules, hedge funds could buy the stock on the day of the IPO, then flip it to passive investors just 15 days later. That's basically a wealth transfer from long-term index investors to fast-money pros."

Additionally, it forces institutional investors to buy SpaceX shares once the company is included in the indices their index funds track.

But one index that SpaceX will not be allowed fast entry to is the S&P 500. "Based on S&P DJI's Index Committee review of the markets and after consideration of responses received from a wide range of market participants, no changes will be made to the eligibility criteria including financial viability screens, seasoning period, or minimum IWF, for the S&P 500, S&P MidCap 400, or S&P SmallCap 600 as a result of the S&P Dow Jones Indices consultation on the treatment of MegaCap companies," wrote S&P Dow Jones Indices in a June 4 release. "Accordingly, there will be no changes to existing methodology for this index family."

Specifically, S&P Dow Jones Indices chose to keep several rules in place, including one that requires a company to trade on a major exchange for 12 months before being considered for inclusion in an index.

So, while SpaceX shares will likely make their way into several index funds within the next several weeks, they will not be in S&P 500 ETFs for at least the next year.

- Karee Venema

Just how dominant is SpaceX as a company?

To underscore SpaceX's dominance, consider that it had 165 launches in 2025, vastly more than any other rocket launcher, and launched 85% of global spacecraft into orbit. Its small satellite constellation, Starlink, is by far the leader in
internet speed and customers.

Unlike many space companies of years past, SpaceX is vertically integrated. It makes its own satellites, antennas, rockets, engines and all sorts of other equipment. It will build its own AI satellites, and plans to even start making its own computer chips through a partnership with Intel (INTC). Controlling all aspects of the business gives it an ongoing edge.

Perhaps an underappreciated competitive threat to SpaceX's Starlink is Amazon's (AMZN) upcoming Leo broadband service. I've tracked Amazon's planned mega-constellation over the years, and my impression is that they are very serious about winning consumers, businesses and governments.

Amazon has deep pockets and is touting how its Leo broadband service will integrate with its AWS cloud computing business. It could even offer discounted broadband for Amazon Prime subscribers.

Of course, Amazon must rely on outside rocket companies, including SpaceX, to get thousands of its satellites into orbit.

Blue Origin, which is owned by Amazon founder Jeff Bezos, could help if it starts launching a lot more in the coming years.

But Blue Origin only had two launches last year, failed to put AST SpaceMobile's satellite into orbit in April and had a massive launchpad disaster last month.

– John Miley

What Renaissance Capital's Avery Marquez is expecting from the SpaceX IPO

Few IPOs arrive with the level of anticipation surrounding SpaceX. The company's scale, brand power, retail investor interest and unusual deal structure have already made it one of the most talked-about offerings in recent memory. But the IPO also comes with significant complexity, from expected volatility and staged lockup releases to the possibility of fast-tracked index inclusion.

For perspective on what this could mean for investors and the broader IPO market, I spoke with Avery Marquez, director of Investment Strategies at Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs.

Your thoughts on the prospects for the IPO?

It's hard to contest the general consensus that this will be a hot deal. Forgoing the typical range for a set price is a solid indicator that the deal is already covered, or at least that the company and underwriters are confident in the massive demand this is expected to generate.

Early trading will likely be very volatile, especially with such a large portion expected to go to retail. I've seen reports still indicating up to 30%. I believe the extensive lockup release schedule and "forced buying" by indexes fast-tracking inclusion will also lend to some interesting trading dynamics in the first few weeks and months.

How does this compare to other large IPOs?

I'm partial to say that there is no real comparison. You can look at something like Saudi Aramco, which is the closest example in size, but the dynamics were quite different, given the government involvement and the market's relative opacity (though worth noting that the Tadawul is more transparent now than back in 2019).

In the U.S., Facebook — now Meta Platforms (META) — may be worth comparing, given the size, governance structure and disruptive tech pitch. But the months of hype leading up to the IPO, the intricacies of SpaceX's business, the sheer number of moving parts make this a wholly unusual deal.

What about the lock-up? Implications?

SpaceX's lockup is one of the most complex I've ever seen. Given the float dynamics, it could be framed as a bid to control that potential flow, or maybe it's just a way to give early investors liquidity before the standard 180 days. I do wonder how much overlap there will be between the release schedule and the schedule of indices that will now be fast-tracking inclusion.

How important is this IPO? What might it mean for the expected IPOs of OpenAI and Anthropic?

It's difficult to point to this as a bellwether for broader IPO activity, given how unusual the deal is. It will be a test of demand at scale, however, which will be particularly important for OpenAI and Anthropic, given how much capital they are expected to raise at IPO. Overall, it's going to be a historic test for the IPO market and will show us how much hype or FOMO is being baked into these high-profile names right now.

- Tom Taulli

Blue Origin explosion highlights the challenges facing a heavy launch

As SpaceX moves from the reusable Falcon 9 to the much bigger Starship, it's worth noting the unique challenges of heavy launchers. Starship is nearly 400 feet tall, while Falcon 9 is 230 feet tall. Starship can lift far heavier payloads, but that requires more powerful engines.

The challenge of a heavy launch was on display during the recent Blue Origin explosion. Its New Glenn rocket is also a heavy launcher. After the incident, NASA Administrator Jared Isaacman said on X, "Spaceflight is unforgiving and developing new heavy-lift launch capability is extraordinarily difficult."

In May, Elon Musk said on X that he was confident about Starship's road to commercialization: "The Starship production pipeline is full and will complete roughly 10 more ships and about half that number of boosters this year, so, if something goes wrong, it will not be a major setback, unless the launch stand is destroyed."

Back in 2020, Musk already had a clear view of Starship's importance, saying it "needs to be reusable and rapidly so, designed to be relaunched an hour after landing with zero nominal work."

- John Miley

Elon Musk reveals space's first space-based AI data center

In a video posted on X, Elon Musk talked about his vision for space-based AI data centers. The first one is called the AI1 satellite, which is expected to be 230 feet long and provide 120 kilowatts of compute power.

The AI1 satellite is based on the core foundation of the Starlink V3 system. According to Musk: "The AI satellite is much simpler than a Starlink satellite. The AI satellite is essentially a lot of solar cells, you still need some laser links, but you don't have all of the super complex antennas that you have on a Starlink satellite. The easier one to design for is the AI satellite."

The AI1 satellite is also expected to include Nvidia (NVDA) GPUs to power the AI processing.

In terms of timing, SpaceX expects to launch demonstration versions of the system in late 2027. So it could easily be a few years until the company generates any revenue from this program.

And Musk has a tendency to overpromise.

Still, space-based data centers are likely to gin up lots of excitement for investors. Land-based systems consume enormous amounts of power and are increasingly running into backlash from communities concerned about electricity demand, water usage, noise and local infrastructure strain. But in space, a data center could tap solar power directly and avoid many of these earthly constraints.

- Tom Taulli

SpaceX's big bets won't come in a hurry

The entire space ecosystem hinges on the success of Starship driving down launch costs. Some space business ideas only pencil out if launch costs are lowered to a certain point.

SpaceX has dreams of launching Starships daily or even hourly to send 1 million AI data centers into space. But how much it costs SpaceX to launch Starship and the price it charges outside customers are different. It may use most or all of Starship's capacity on its own orbital data centers.

While SpaceX has drastically lowered launch costs with its reusable Falcon 9, it's not passing all those savings over to customers, since it controls the market. Still, it does continue to have good relationships with all its customers.

Other launchers include Rocket Lab, Arianespace, United Launch Alliance and Firefly Aerospace. Rocket Lab ranked second globally in commercial launches last year with 18.

SpaceX takes the long view and dreams big. I often remind readers that SpaceX is 24 years old. Starlink was announced in 2015, and the first satellites were launched in 2019. It took a long time for SpaceX to get to this point.

When you look over SpaceX's prospectus and investor presentation, you see plans that could take years or decades to happen, including a mission to Mars. SpaceX will keep betting big on missions that will take a long time to pan out, using money from today's successes to fund tomorrow's dreams. Such a strategy carries inherent risk.

Consider that Musk has said, "The whole purpose of SpaceX is to help make life multiplanetary."

- John Miley

Hyperliquid SpaceX perpetual futures signal a big premium to IPO price

Perpetual futures on Hyperliquid, a decentralized blockchain-based trading platform, showed SpaceX shares trading around $168 at last check — a nearly 25% premium to the $135 IPO price. Still, that's down more than 6% from where the SpaceX "perp" was trading a month ago.

Hyperliquid has become a place for traders to speculate on assets such as cryptocurrency and commodities without actually owning them.

"Perpetuals never expire and users can hold positions indefinitely," explains BofA Securities analyst Julie Hoover. "Because there is no maturity, venues employ a funding-rate mechanism to keep perp prices anchored to the spot price. Volume on perps has tripled from ~$30T in 2023 to ~$93T in 2025."

According to BofA, Hyperliquid, in particular, has become popular for its pre-IPO pricing markets. "Like prediction markets gained popularity for calling the U.S. Presidential election, people argue that Hyperliquid is having their moment for accurately predicting IPOs."

If Hyperliquid's pre-IPO pricing of SpaceX perps is accurate, shares could be poised for a big jump when they first start trading.

- Karee Venema

SpaceX's unconventional IPO pricing

Elon Musk has always had a penchant for being unconventional. It has certainly been key to his many successes and his enormous wealth. So it should be no surprise that the SpaceX IPO has taken a different path from the traditional Wall Street playbook.

In a typical IPO, the company and its underwriters set an initial price range, conduct a roadshow, collect orders from investors and then determine the final price based on demand. This process is called "book building." It's a way to gauge investor demand. If the demand is strong, the company will set the deal at a higher price and vice versa.

The SpaceX IPO, on the other hand, has used a fixed price approach. According to Reuters, SpaceX set the IPO price at $135 per share, with plans to sell 555.6 million shares and raise about $75 billion. This would value the company at roughly $1.77 trillion.

The valuation was likely based on SpaceX's own internal assessment of the business and its long-term opportunities. But this was not just about traditional metrics such as revenue, earnings or comparable companies. A big part of the valuation was probably the "Musk factor." He has a long track record of making money for investors, and he has built a large base of loyal retail followers.

Still, the approach carries risks. The IPO is massive, the valuation is aggressive and the markets have been volatile lately. Even for a company like SpaceX, that makes the debut far from risk-free.

- Tom Taulli

The economics of AI data centers

Orbital data centers are unproven, though some companies have already launched prototypes. The economics of AI data centers in space is a big question mark. Can they really compete with terrestrial data centers? SpaceX certainly thinks so.

Consider the vast scale Elon Musk is talking about. Nearly 2,200 tons were launched into orbit in 2024. During a presentation this year, Musk talked about launching 10 million tons into orbit per year to put a terawatt of compute into space yearly.

Sound impossible? Musk's response: "We're confident this is feasible. No new physics or impossible things are required to get there."

Musk also envisions humanoid robots manufacturing satellites on the moon and then using electromagnetic mass driving to send them into orbit. Pursuing these ventures will be enormously expensive.

- John Miley

SpaceX confirms IPO pricing

Shortly before the close on Thursday, SpaceX set its final pricing for its initial public offering, confirming (PDF) that it will sell 5.6 million shares at $135 apiece.

The company also said that it will grant its underwriters a 30-day option to buy up to 83.3 million additional shares of its Class A common stock.

At $135 per share, SpaceX is poised to raise $75 billion in its offering, which will make it the largest IPO ever, easily exceeding the current record holder — Alibaba Group Holding (BABA) and its $21.8 billion offering in 2014. It will also give the company a $1.75 trillion valuation, making it the seventh-largest U.S. company by market cap and just ahead of Musk's other public company, Tesla (TSLA).

- Karee Venema

Stocks close higher ahead of SpaceX's market debut

Stocks closed higher Thursday after President Donald Trump walked back a threat to strike Iran "VERY HARD" on Thursday night and take "total control" of its oil and gas assets.

"Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved," Trump posted on Truth Social, "I have, as President of the United States of America, cancelled the scheduled strikes and bombings against Iran this evening."

A rebound in chip stocks also helped the broader markets bounce back from early week losses, though AI stock Oracle (ORCL) tumbled sharply after its earnings report on cost concerns.

By the closing bell, the blue-chip Dow Jones Industrial Average was up 1.9% at 50,848, the broad-based S&P 500 was higher by 1.8% at 7,394, and the tech-heavy Nasdaq Composite had added 2.5% at 25,809.

That's it from us today. Join us tomorrow for more updates and insight into the SpaceX IPO.

Stock futures point mostly higher on SpaceX day

The main equity indexes are trading mostly higher ahead of SpaceX's (SPCX) market debut.

At last check, futures on the blue-chip Dow Jones Industrial Average are up 0.3% and the broader S&P 500 are 0.1% higher. Futures on the Nasdaq-100 are down 0.3% lower, though, as Adobe (ADBE) slumps after earnings.

SpaceX gets mixed reviews from Wall Street

One reason there have been few analyst reports on the SpaceX IPO is that the company hired 23 banks for the offering. Keep in mind that they are under strict conflict-of-interest rules and must endure a 25-day quiet period.

But this week, several interesting reports from analysts surfaced that were not part of the IPO syndicate. On the bullish side, New Street Research set a $165 price target on SpaceX shares, representing a 22% premium to the IPO price. This is based on a $195 billion revenue projection for 2030.

Additionally, Oppenheimer initiated coverage on SPCX stock with a Buy rating. The price target: $190.

But Morningstar published a report that was quite bearish. Analyst Nicolas Owens puts the valuation on SpaceX at only $63 per share, or a 53% discount to the IPO price.

"Our valuation is the result of mathematics more than skepticism," says Owens. "With such a wide range of possible outcomes for the company's financial future, we created forecasts and valuations for three scenarios and probability-weighted them."

- Tom Taulli

What time will SpaceX stock start trading?

SpaceX stock will likely start trading on the Nasdaq this afternoon. New stocks typically make their market debut after lunchtime, so look for shares to open for trading around 1 pm to 2 pm Eastern Standard Time.

SpaceX IPO will boost funding and attention to space stocks, but investors must be aware of risks

Related to Elon's vision of a Mars mission and taking the long view, here's a quote I have in my notes from a keynote I attended at the 2020 satellite conference in Washington, D.C.: "I hope I'm not dead by the time people come to Mars. If we don't improve our pace of progress, I'm definitely going to be dead before we go to Mars. If it's taken us 18 years to get people to orbit, we have to improve our pace of innovation a lot."

With a huge amount of funding from the IPO, there's no doubt the intense focus on pushing the "pace of progress" will only accelerate.

As I wrote in April, SpaceX's stock listing will bring a new wave of capital to the entire sector, including from a flood of retail investors. Investors in the space sector are bullish about SpaceX's unprecedented stock listing.

The IPO is an "inflection point" for the space industry, said Michael Mealling, general partner at Starbridge Venture Capital, at SatShow. Mark Boggett, CEO of Seraphim Space, said it will pull up valuations across the entire sector.

The heightened attention means that more Wall Street analysts will start covering the sector as space companies are included in more stock funds and more space companies go public.

Investors should know that space stocks can be risky, requiring due diligence, and that the frenzy among investors could outpace the reality of individual businesses.

"I am a little concerned about public market investors looking at the space sector and not understanding the level of risk," said Mealling. "Not every company that goes public is a good company." Mealling also said that having lived through the dot-com bubble of the late 1990s, "I hope we don't replicate that."

- John Miley

Neuberger Berman's Daniel Hanson on why SpaceX fits a quality equity strategy

Daniel Hanson, manager of the $2.1 billion Neuberger Berman Quality Equity Fund (NBSLX), has delivered strong results, with the fund generating an average annual return of 24.2% over the past three years. One of the more distinctive parts of the portfolio has been its pre-IPO investment in SpaceX.

I had a chance to interview Daniel and here's what he had to say:

When did you start buying SpaceX? What were the factors for making the investment? What is the current allocation?

We established the NBSLX position in SpaceX in the second half of 2023 at a company valuation of $150 billion, based on SpaceX's alignment with the Quality Equity investment philosophy. I look for 3 criteria for any Quality Equity investment, all of which SpaceX is aligned with: strong profitable growth, an entrepreneurial management team and an ownership culture. It also has a clear business purpose. The NBSLX fund's pre-IPO private allocation was approximately 7%.

What's your bullish case for the next few years? Drivers?

SpaceX comprises three distinct leadership mega-cap businesses, each of which has a promising growth outlook.

First is the launch business, where SpaceX has an unmatched global lead with the Falcon 9, and exceptional upside with the Starship program.

Second is the Starlink business, currently with 11 million subscribers and rapid growth prospects to add tens of millions of incremental subscribers.

Third is the xAI business, which has both leading proprietary initiatives, including 500 million+ monthly active users on Grok and X.com, with highly profitable third-party data center compute contracts with the likes of Anthropic and Alphabet (GOOGL). There is also its market-leading ambitions to commercialize orbital data centers in the coming years.

Besides SpaceX, does your firm have any other private investments?

Yes, Neuberger has a large private equity business.

The Neuberger Berman Quality Equity Fund was the only direct private pre-IPO owner of SpaceX at Neuberger due to the strong track record of the SpaceX team and the alignment of the business with the Quality Equity investment approach.

- Tom Taulli

How worried should investors be about the "Musk Effect"?

Perpetual futures are indicating a big jump for SpaceX stock when it begins trading this afternoon, last seen trading near $180 — 33% above the IPO price.

Part of this is likely due what many refer to the "Musk Effect. As I told CNET, Elon Musk has the tendency to stoke enthusiasm given the number of extraordinary things he's done, and we're seeing that in the excitement surrounding the SpaceX IPO.

"I don’t think the 'Musk Effect' is some made-up premium ... it's backed by execution over and over again," says David Fetherstonhaugh, senior vice president and investment strategist at VistaShares. "There is something real there."

For SpaceX, specifically, Fetherstonhaugh points to the company's aggressive launch cadence over the past several years. "SpaceX did 25 launches in 2020. Then 31. Then 61. Then 96. Then 134. Then 165 last year. At some point, that is not a cool stat anymore. He is actively pushing the boundaries of multiple industries."

And impressive growth in Starlink revenue, which jumped 50% year over year in 2025, will help fund SpaceX's other initiatives.

Fetherstonhaugh admits that the SpaceX IPO is not cheap, but says that "no other public company that gives you this combination of launch, satellites, connectivity, and full-stack control of space infrastructure." So, if you buy SPCX stock, you're "paying up for execution, speed, and the possibility that the market is much bigger than investors originally thought."

However, buyers should know that the "Musk Effect" goes both ways. Folks were quick to sell Tesla shares and stop buying Tesla cars in early 2025 in part because of a backlash related to Musk's actions and commentary when he was head of the Department of Government Efficiency (DOGE).

As Fetherstonhaugh cautions, "anything tied to Musk is going to come with volatility."

- Karee Venema

Elon Musk's net worth could top $1 trillion today

Elon Musk has long held the title as the richest person in the world, but he cemented that status following SpaceX's blockbuster IPO, which will likely make him the first-ever trillionaire once SPCX stock begins trading, on paper at least.

At last check, Forbes had Elon Musk's net worth at $981.1 billion. We'll check this again at the end of the day.

The energy impact on orbital data centers

I'm still skeptical of orbital data centers technically working in a lot of ways. But the economics is an even bigger question. How the heck do you get the cost equivalent or better than Earth-based data centers?

I wrote a story about why AI dominance is measured by energy, and it's true AI models get better with more data, parameters and compute. That takes massive amounts of energy. There's no real sign that it's slowing, but in a decade, could there be some energy-efficient breakthrough? Or more efficient models? Or demand dies down? Seems possible and that would mess with orbital data center business models. They also require very low launch costs.

I read an interesting article that if Starship launched hourly, it would be a huge pollution issue. Because Starship is so enormous, it requires far bigger engines that create massive amounts of pollution. That's not an issue now with 10-20 heavy launches per year. But if you do 100s of heavy launches? I guess it could be an issue.

- John Miley

SpaceX stock opens above IPO price

SpaceX (SPCX) stock has officially begun trading on the Nasdaq, with shares opening at $150 per share, more than 11% above the IPO price.

At last check, shares were seen near $157 after hitting an intraday high of $162.98 (as of 11:55).

SpaceX IPO governance: why Elon Musk's control could become a bigger investor issue

The buzz surrounding the SpaceX IPO has focused mostly on the company's massive valuation, retail investor demand and the potential for one of the largest public offerings in market history. But there has been much less attention on a critical issue for investors: corporate governance.

Alon Kapen, a partner and corporate transactional lawyer at Farrell Fritz P.C., has reviewed SpaceX's S-1 and sees several provisions that stand out. Here's what he had to say:

What are some of the key governance issues?

I'd say the concentration of control is the major governance issue here. SpaceX's governance structure seems designed to ensure that Elon Musk retains authority over the company's strategic direction, even as public shareholders come in.

The mechanism for effectuating this level of control begins with SpaceX's dual-class share structure, in which Musk's Class B shares carry 10 votes each, versus one vote per Class A share sold to the public. The structure results in Musk controlling 85% of SpaceX's voting power despite holding only approximately 42% of its equity.

Also, Musk can only be removed from his roles as CEO, CTO and chairman by a vote of Class B shareholders, which he controls.

Another key governance issue is dispute resolution. SpaceX has adopted a mandatory binding arbitration clause for all shareholder disputes, and I believe it's the first major U.S. company to do so in a public offering. Shareholders must "irrevocably and unconditionally" waive the right to a jury trial and are prohibited from bringing class actions against the company or its directors, officers or controlling shareholders.

Finally, SpaceX reincorporated in 2024 from Delaware to Texas. Texas imposes greater procedural hurdles for initiating tender offers, proxy contests and shareholder proposals, making it more difficult for activists to wage activism campaigns such as removing directors or officers.

How does SpaceX's governance compare to other tech companies?

SpaceX's dual-class capital structure certainly fits within a broader pattern of founder-led companies where insiders retain supermajority control post-IPO. Think Facebook, Snap, Google and Tesla where dual-class shares preserve founder authority beyond an IPO. But unlike SpaceX, at least most of those companies had built in sunset provisions.

Might SpaceX's governance approach influence other companies? Or is this more of a special situation?

I think it's both. SpaceX is obviously a special situation. It has a national security dimension that arguably gives regulators reason to defer to management continuity. That makes it hard to generalize. But it could still reinforce an ongoing trend of founders pushing for dual-class structures and extending control post-IPO.

If SpaceX goes public with aggressive founder control preservation mechanisms and the stock performs well, it will be harder for investors to push back on the next company that tries it.

Ultimately, SpaceX can justify its structure because of its track record and unique positioning with governments. Without those factors, though, companies trying to duplicate their governance model would likely face significant investor pushback.

- Tom Taulli

Why history points to a rough road for SpaceX stock

The SpaceX IPO may be one of the most anticipated public offerings in years. But a recent Truist study offers a cautionary reminder: big-name IPOs often come with severe volatility. The study looked at 30 major IPOs and found that the average maximum drawdown in the first year was 55%. Even more striking, the best case still involved a 20% decline, while the worst fell 90%. While the average 12-month return was positive, the median return was negative.

This could be an ominous sign for early SpaceX investors. The company has enormous promise, but the hype is already intense. That alone can create a valuation that is difficult to sustain once the stock begins trading and investors start scrutinizing the numbers.

SpaceX is also a complicated business. It is not just a rocket company. It includes launch services, Starlink broadband, Starship development, an AI-related segment and even X (the social media platform formerly known as Twitter). Each has different risks, economics, capital needs and timelines. That complexity could make it harder for public investors to value the company, especially if one segment disappoints.

Then there is the lock-up issue. Many early employees, executives and investors are sitting on enormous gains. Once they are allowed to sell, the temptation to unload shares could be strong.

This does not mean SpaceX will fail as a public company. But it does suggest that the first year could be far more volatile than the launch-day excitement implies.

- Tom Taulli

Tesla trades lower as SpaceX stock soars

While SpaceX stock is higher in afternoon trading on Friday, Tesla (TSLA) shares were last seen in negative territory, down 0.2%.

Elon Musk's other publicly traded company has struggled on the price charts in recent months and is down more than 11% for the year to date.

But in the longer term, Tesla has been a strong performer. Over the past 15 years, for instance, the consumer discretionary stock has averaged an annual gain of 43%, outperforming the broader S&P 500 by more than 28 percentage points.

And Wall Street is generally upbeat on Tesla's outlook. Of the 47 analysts covering the stock who are tracked by S&P Global Market Intelligence, 23 say it's a Buy or Strong Buy, 18 have it at Hold and six rate it a Sell or Strong Sell. This works out to a consensus Buy recommendation.

Meanwhile, the average 12-month price target of $420.55 represents implied upside of nearly 6% to current levels.

- Karee Venema

SpaceX IPO mints one new trillionaire, thousands of new millionaires

Elon Musk is officially a trillionaire, on paper at least. With SpaceX stock trading near $165 per share at last check, Musk's net worth has swelled to $1.1 trillion, up $88.7 billion from yesterday.

However, Musk isn't the only person who has seen their net worth swell today. According to The New York Times, roughly 4,400 current and former SpaceX employees who held onto their early shares are poised to become millionaires in the aftermath of the blockbuster IPO.

And 400 of those people are expected to see their wealth jump past the $100 million marker.

- Karee Venema

What Wall Street is saying about the SpaceX IPO

There was no shortage of analyst notes released today about the SpaceX IPO. Here's a small sampling of what Wall Street has to say, edited at times for brevity:

"Everyone thinks of SpaceX as a rocket company. Increasingly, that’s the wrong lens. In a matter of months, SpaceX has become the world's largest and most profitable AI neocloud, and over the next year, that business will contribute more profits than launches or satellite internet." - Nicholas Anderson, portfolio manager at Thornburg Investment Management

"It's important to take some of the projections with a grain of salt. Elon has talked about a total addressable market of $28.5 trillion. Interestingly, the majority of that opportunity is tied to what is currently the company's cash incinerator — the AI segment of the business. We're also expecting a merger with Tesla in 2027 or 2028, so it's possible to envision a scenario in which not only the company's market capitalization, but also its revenue growth, becomes exponential. Right now, it's difficult to even quantify the potential scale." - Nancy Tengler, CEO and CIO at Laffer Tengler Investments

"This is not just an IPO — it's a major liquidity event for venture capital, with significant upside potential but elevated valuation, governance, and volatility risks." - Kaush Amin, Managing Director and Head of Private Market Investing at U.S. Bank Asset Management

"We have a negative outlook given dependence on unproven outcomes including Starship commercialization, orbital AI compute, and xAI monetization. While Starlink remains the strongest business, it faces risks from capacity expansion needs, regulatory approvals, and competition from terrestrial broadband and other LEO systems. We believe the market assigns too much value to future optionality and insufficient discount to execution risk." - Keith Snyder, Senior Equity Analyst at CFRA Research

"What's worth watching more closely is what comes after SpaceX. The upcoming IPO pipeline may look like a celebration of the AI boom, but looking at trader sentiment, it could have the makings of a late-cycle rush. As the company dominates commercial launch and Starlink continues to scale, analysts at New Street Research are already projecting 22% upside within 12 months of listing. The risks here aren't necessarily that SpaceX is a bad investment, but that a $1.77T entry point leaves very little margin for error, and that the retail enthusiasm surrounding it could produce the kind of volatility that shakes out investors before things play out in the long-term." - Stephen Callahan, Trading Behavior Analyst at Firstrade

- Karee Venema

SpaceX becomes the sixth largest U.S. company by market cap

At last check, SpaceX stock is trading near $170 per share, giving Elon Musk's space and exploration company a market valuation of $2.22 trillion. This makes SpaceX the sixth-biggest U.S. company by market cap, behind Nvidia (NVDA), Alphabet (GOOGL), Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN).

Tesla (TSLA), Elon Musk's other publicly traded company, is the eighth-largest U.S. company by market cap, with a valuation of $1.51 trillion.

"SpaceX is not your typical mega-cap company," says Matt Britzman, senior equity analyst at Hargreaves Lansdown. "Investors are being asked to underwrite an investment case and product roadmap that stretches well beyond the time horizon for your typical trillion-dollar-club business."

Britzman adds that traditional valuation tools can help frame the debate on a stock, "but they only go so far when so much of the story depends on future breakthroughs, new markets and successful execution across several ambitious areas at once."

As such, he cautions that this creates both opportunity and risk, and "investors would do well to be mindful of both sides of that coin."

- Karee Venema

SpaceX enjoys a peaceful launch

The main equity indexes were mixed this morning, ahead of the debut of Elon Musk's SpaceX as a publicly traded company.

SpaceX (SPCX) started trading at about 11:45 am Eastern Standard Time and immediately popped 11.1% from its $135 offering price to $150. SPCX closed up 19.2% at $160.95, making Elon Musk the world's first trillionaire.

Meanwhile, all three main indexes rallied on firmer word of a potential agreement between the U.S. and Iran that would open the Strait of Hormuz.

By the closing bell, the blue-chip Dow Jones Industrial Average was up 0.7% at 51,202, the broad-based S&P 500 was higher by 0.5% at 7,431, and the tech-heavy Nasdaq Composite had added 0.3% at 25,888.

– David Dittman

Should You Buy SPCX Stock?

karee.venema@futurenet.com (Karee Venema) — Fri, 15 May 2026 11:15:00 +0000

When Elon Musk took Tesla (TSLA) to market in June 2010, the electric vehicle maker raised more than $226 million in its initial public offering (IPO).

That pales in comparison with General Motors (GM), which raised roughly $20 billion in its November 2010 offering, when the automaker returned to the public markets after filing for Chapter 11 bankruptcy in 2009.

Tesla has grown into a trillion-dollar company and the biggest U.S. automaker by market capitalization. The stock has also averaged an annual return of 42% since it began trading, outpacing the broader S&P 500 by 31 percentage points.

Musk, however, has had his redemption on the IPO stage, with the entrepreneur taking SpaceX, his space exploration and satellite company, public in what is the biggest IPO ever.

What is SpaceX?

The global space economy is expected to reach $1 trillion by 2034, according to Novaspace.

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In 2025, the company's revenue totaled $18.67 billion, while adjusted EBITDA arrived at $6.58 billion.

When is the SpaceX IPO date?

SpaceX confidentially filed its IPO paperwork with the SEC in early April — and in late May, it filed its prospectus which revealed that Musk will own roughly 42% of the company's equity and control about 80% of the total voting power.

On Thursday, June 11, SpaceX confirmed a fixed per-share price of $135 ahead of its IPO and said it will sell 555.6 million shares. In its S-1 filing, the company said that 5% of common stock will be reserved for "certain employees and persons" to purchase at the offering price. And reports suggest roughly 20% was made available to retail investors, a higher-than-usual amount for IPOs.

At $135 per share, SpaceX raised $75 billion in its offering, making it the largest U.S. IPO ever, easily exceeding the previous record holder — Alibaba Group Holding (BABA) and its $21.8 billion offering in 2014. It also surpassed Saudi Aramco as the biggest global IPO ever.

At $135 per share, SpaceX is poised to raise $75 billion in its offering, which will make it the largest IPO ever.

The SpaceX IPO occurred on June 11, and SPCX stock made its market debut on the Nasdaq on June 12. Shares opened at $150, hit a session high of $176.52, and settled at $160.95.

SpaceX's market valuation at Friday's close was $2.105 trillion, making it the sixth-largest U.S. company by market cap.

Should you buy the SpaceX IPO?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

But buyer beware: IPOs can be volatile — especially for retail investors. In the "froth and frenzy, opportunities mix with peril," writes David Milstead, senior associate editor at the Kiplinger Personal Finance magazine. "The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports."

Investors should also be aware of the Musk Effect, which refers to the impact Elon Musk's actions and commentary have had on Tesla — both on and off the price chart. As one example, Tesla's revenue and share price slumped in early 2025, in part because of backlash related to Musk's time at the Department of Government Efficiency (DOGE).

Another reason to possibly hold off on buying SpaceX stock is the Nasdaq's new "fast entry" rule that speeds the process of adding new companies to its Nasdaq-100 index.

Investors should also be aware of the Musk Effect, which refers to the impact Elon Musk's actions and commentary have had on Tesla — both on and off the price chart.

"Under the new rules (PDF), which went into effect on May 1, newly public megacaps would be eligible for inclusion after just 15 trading days – and with only five days of prior market notice," writes Kiplinger contributor Dan Burrows.

Given that "a longer waiting period informs price discovery," Burrows explains, "it's fair to say passive investors won't be getting the best price" on these newly public companies.

The bottom line: Whether you buy the SpaceX IPO comes down to your own risk tolerance and personal investing goals. If you decide to buy shares of SpaceX stock when it first begins trading, do so in a small amount that you can afford to lose and have a trading plan in place.

Nasdaq Sinks as Software Stocks Slump: Stock Market Today

karee.venema@futurenet.com (Karee Venema) — Thu, 23 Apr 2026 20:08:55 +0000

(Image credit: Getty Images)

The stock market's rebound was short-lived, with all three main equity indexes closing lower Thursday. Sparking the sell-off was a round of disappointing blue-chip earnings, while market participants also kept an eye on geopolitical headlines, with little sign of a peace deal in sight.

First-quarter earnings season is in full swing, and the latest batch of corporate reports made plenty of noise. Tesla (TSLA), for one, fell 3.6% as the electric vehicle maker's Q1 beat was overshadowed by a big increase in spending.

Specifically, the company has carved out $25 billion for capital expenditures this year — a notable increase from 2025's $8.5 billion.

"We're investing in and improving our core technologies, battery powertrain, AI software, AI training, chip design, manufacturing — laying the groundwork for significantly increased manufacturing and production," said CEO Elon Musk on Tesla's earnings call.

Musk added that the company is also strengthening its supply chain ahead of output increases for its vehicles, as well as for Optimus, its humanoid robot.

"While we continue to have concerns regarding the company's spending binge, we are also more bullish on near-term margin and operating cash flow profile," says CFRA Research analyst Garrett Nelson, who upgraded the Magnificent 7 stock to Hold from Sell. "Moreover, consensus estimates have come down to levels we think are more achievable and now consider the stock's risk/reward more balanced following TSLA's recent underperformance."

Shares are down nearly 17% for the year to date vs the S&P 500's roughly 4% gain.

IBM hikes dividend but stock dives 8.3%

Elsewhere on the earnings calendar, International Business Machines (IBM) reported first-quarter earnings of $1.91 per share on revenue of $15.9 billion, beating analysts' estimates for earnings of $1.81 per share on revenue of $15.6 billion.

Big Blue also raised its quarterly dividend by 1 cent to $1.69 per share. IBM is one of the best dividend stocks for dependable dividend growth, having raised its payout for 31 straight years.

But the Dow Jones stock fell 8.3% today after the software giant failed to raise its full-year guidance. Signs that its Red Hat Hybrid cloud business is growing slower than peers also weighed on shares, says Argus Research analyst Jim Kelleher.

Still, Kelleher reiterated a Buy rating on IBM, saying "prospects for this business in 2026 appear to be positive."

ServiceNow suffers its worst day ever after earnings

ServiceNow (NOW) was another software stock that fell sharply after earnings, sinking 17.8% — its biggest one-day drop on record.

The software-as-a-service (SaaS) platform that uses AI to automate workflows for companies beat on both the top and bottom lines for Q1. However, ServiceNow said that the ongoing conflict in the Middle East impacted deal timing and weighed on first-quarter subscription revenue. The Iran war also caused NOW to give conservative guidance.

"ServiceNow's Q1 results are good but show lower beat magnitudes. In addition, management took a prudent approach to Q2 cRPO [current remaining performance obligation, a key revenue metric] growth and 2026 guidance to reflect continuing geopolitical headwinds and acquisition integration expenses," says Oppenheimer analyst Brian Schwartz.

But Schwartz maintained an Outperform (Buy) rating on the tech stock, saying he's "encouraged that the AI business looks positioned to exceed 10% of total revenue this year given prudent guidance and strong demand for AI technology."

No signs of progress in the Middle East

As for the conflict in the Middle East, today's headlines centered on President Donald Trump's Truth Social post that he has "ordered the United States Navy to shoot and kill any boat, small boats though they may be (Their naval ships are ALL, 159 of them, at the bottom of the sea!), that is putting mines in the waters of the Strait of Hormuz."

The lack of resolution lifted oil prices Thursday, with front-month West Texas Intermediate crude futures climbing 3% to $95.95 per barrel.

But stocks fell, with the blue-chip Dow Jones Industrial Average declining 0.4% to 49,310, the broader S&P 500 dropping 0.4% to 7,108, and the tech-heavy Nasdaq Composite shedding 0.9% to 24,438.

Why I Trust These Trillion-Dollar Stocks

James K. Glassman — Fri, 28 Nov 2025 12:02:00 +0000

(Image credit: Getty Images)

Who would have believed at the turn of the 21st century that there would be such a thing as a trillion-dollar stock? (Or that the Dow would reach 36,000, for that matter?)

At the end of 2000, the most valuable company was Exxon Mobil (XOM), with a market capitalization — price times shares outstanding — of roughly $302 billion. That's one-fifteenth the value of Nvidia (NVDA) today. Just counting to a trillion incredibly fast, with no bathroom breaks, would take 32,000 years, according to the Q&A platform Quora.com.

In August 2017, however, I wrote, "It may be a matter of months, or more likely a few years, but sometime soon a U.S. company will breach the trillion-dollar mark." I was more right than I expected.

At the time, I offered estimates of when each would hit a trillion in market cap. Apple (AAPL) was first, as I predicted, but it took just 11 months, a year and a half ahead of schedule. The other four quickly followed: Amazon.com (AMZN) in September 2018; Microsoft (MSFT) in 2019; Alphabet (GOOGL), the former Google, in 2020; and Meta Platforms (META), the former Facebook, in 2021.

At that point, I wrote another column, saying, "I'm doubling down and recommending them all." Sure enough, as a group, they have nearly doubled. (Prices, returns and other data are as of September 30; stocks I like are in bold.)

Today, with the additions of Nvidia, Tesla (TSLA), Broadcom (AVGO) and Berkshire Hathaway (BRK.B), membership in the Trillion-Dollar Club (let's call it TDC) has grown to nine. The combined market cap of these stocks accounts for 41% of the capitalization of all the companies of the S&P 500 Index. A mere 10 years ago, the nine largest U.S. stocks had a total market cap of 18% of the S&P 500.

Today, eight of the nine members of the TDC are technology (or tech-related) stocks, and for the ninth, Berkshire, Apple alone represents one-fifth of assets. By contrast, in 2015, the top nine consisted of just five tech stocks, plus companies in banking, pharmaceuticals and energy, along with Berkshire. In 2005, only two tech companies graced a highly diversified top nine.

Concentrated bets

The top-heavy nature of the S&P 500 today should make any investor worried. The market is betting heavily, not simply on tech but on artificial intelligence. But you will notice from the bold-facing that I still like trillion-dollar stocks — at least the initial cohort.

Why? Let's start with Alphabet. Since 2017, revenues have quadrupled and earnings have quintupled, yet the stock's price-to-earnings (P/E) ratio, based on a consensus of analysts' forecasts of profits for the year ahead, has declined from 30 to 25. Analysts at investment research firm Value Line expect earnings will rise an average of 12% annually for the next five years, indicating a perfectly reasonable valuation.

Alphabet owns the global entertainment asset with the greatest potential, YouTube, with nearly 3 billion active users. The company is also sitting on more than $95 billion in cash and has very little debt; it has even started paying a small dividend.

Amazon's P/E has dropped from nearly 200 to 32. It dominates the e-commerce market, accounting for 38% of sales, compared with 6% for number two Walmart (WMT).

Apple's valuation has risen to 33, but it was absurdly low (16) in 2017. The company is a profit machine; it earns about 25 cents on every dollar of sales, and those dollars will exceed 400 billion this year. Microsoft has tripled its earnings since 2017. It has a powerful cloud-computing business and has integrated AI into all its platforms.

Meta gets the least respect. Its forward P/E has fallen from 29 in 2017 to 25, despite net profits rising from $18 billion to close to an estimated $72 billion in 2025. The company, which owns WhatsApp and Instagram, recently won its antitrust case, leaving the ownership of its assets intact.

I am less enamored of the TDC newbies. Nvidia was once a lovely choice. In making it one of my 10 stock picks for 2020, I wrote that it "may be the best artificial intelligence play." Since then, its market cap has risen from $122 billion to $4.5 trillion.

Ponder that number. It’s more than the capitalization of all the listed stocks in the U.K. It is greater than the GDP of Japan. Nvidia, with its graphic processing units, has little competition for top-level AI chips used in data centers, but that is going to change. There is too much money to be made.

Broadcom, a semiconductor company with a niche in AI chips called application-specific integrated circuits, which have specialized functions, is the change agent. It became the newest member of the TDC in December 2024 after its stock price increased by a factor of six in four years. Value Line expects earnings to continue rising at a 24.5% annualized clip through 2030.

Broadcom, like Nvidia, does not own manufacturing plants, or "fabs." That allows the company to retain its capital, but it also leaves it vulnerable to supply interruptions. My other worries about the future of the chip business are government intervention, geopolitical threats and a lack of electricity to power data centers in the U.S.; still, it’s hard not to like Broadcom.

Tesla, which reached $1 trillion in market cap in October 2021, then fell out of the club a few times and came back in, looks more attractive now that its CEO is getting back to work. I am especially excited about its battery storage business.

But Tesla is clearly a meme stock, driven by the enthusiasm of fans. Its revenues have been flat for three years, profits are microscopic by TDC standards, and capital spending requirements are huge.

The outlier, Berkshire, has a P/E in the mid-20s and a brilliant CEO in his nineties. I'm loyal to Warren Buffett and confident in his successors. Berkshire has a hoard of liquid assets, and insurance is the best business in America outside of tech.

When I wrote about trillion-dollar stocks in 2021, I warned about "a sort of law of financial gravity." It's not hard to imagine a stock with a market cap of $100 billion becoming a four-bagger (that is, quadrupling in value) or even a 40-bagger, as Nvidia has proven.

But could Nvidia quadruple from its current value? Could Microsoft or Apple, at $3.8 trillion each? It seems doubtful. Still, doubles or triples are satisfying.

The legacy TDC companies have shown a remarkable ability to innovate and adapt. Operating-system software, for example, used to dominate Microsoft's revenues. Now, it represents only about one-tenth of sales. Server and cloud services account for 40% today, with gaming and LinkedIn making significant contributions.

These are truly exceptional businesses with extensive moats and deep human capital. As crazy as it sounds, they deserve to be trillion-dollar companies — and to keep growing.

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. Of the stocks mentioned here, he owns Amazon.com. You can reach him at JKGlassman@gmail.com.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Elon Musk's $1 Trillion Pay Package Passes: What's at Stake for Tesla Stock

karee.venema@futurenet.com (Karee Venema) — Wed, 05 Nov 2025 17:35:02 +0000

Tesla (TSLA) shareholders overwhelmingly approved a new pay package for CEO Elon Musk that could be worth up to $1 trillion.

The compensation comes with some fairly steep hurdles that the electric vehicle maker will need to surpass in order for Musk to collect, which could have big implications for the Magnificent 7 stock.

While Musk's 2018 pay package is currently in litigation, in early September, Tesla's board of directors outlined a new 2025 CEO pay package. The board also specified specific targets that must be hit for Musk to earn the full compensation of 423.7 million shares of Tesla's common stock.

The shares will be distributed in 12 lots of 35.3 million apiece as certain market cap milestones are met in the next decade — the first being $2 trillion and the last being $8.5 trillion. TSLA closed on November 6 with a $1.5 trillion market capitalization.

There are also 12 operational milestones that need to be reached for Musk to reap his rewards. These include 20 million Tesla vehicles delivered, 1 million robotaxis in operation and four consecutive fiscal quarters of $400 billion in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

In its most recently reported quarter, Tesla delivered just shy of 498,000 vehicles and reported adjusted EBITDA of $4.2 billion.

If Musk meets these milestones, he could own up to 25% of Tesla, up from his current 13% ownership.

"We are, and have always been, a company that thinks bolder, acts faster and strives for a better future," the board wrote. "We believe that Elon's singular vision is vital to navigating this critical inflection point," and "retaining and incentivizing Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history."

How did Tesla shareholders vote on Musk's pay package?

Musk's new pay package required shareholder approval, and they overwhelmingly voted to support it. Tesla said more than three-quarters of stakeholders voted yes on the measure.

Nancy Tengler, CEO and CIO of Laffer Tengler Investments, says her firm voted for the pay package.

"I like having my incentives aligned with the CEO. If he's going to get shares, his incentive is to increase the value of those shares. That works for me as a shareholder," she says. "What we saw in the last round with his pay package was that he hit some ridiculous goals no one thought he could hit — and he's never been paid for it because it's been tied up in court. That, to me, is just wrong."

But there were some high-profile dissenters. Norway's sovereign fund, which is managed by Norges Bank Investment Management (NBIM) and owns a 1.1% stake in Tesla as of June 30, recently said that it voted against the pay package.

"While we appreciate the significant value created under Mr. Musk's visionary role, we are concerned about the total size of the award, dilution and lack of mitigation of key person risk — consistent with our views on executive compensation," NBIM posted on its website.

What does approval mean for Tesla stock?

Wedbush analyst Daniel Ives expected Musk to get "overwhelming shareholder approval" for the pay package despite opposition from various shareholders. A yes vote "sends a loud and clear message to Elon being 'wartime CEO' during this most important chapter of growth in Tesla's history as the AI revolution is here."

Ives has an Outperform rating on Tesla stock and a Street-high $600 price target, representing implied upside of 35% to current levels. If Tesla reaches the top market cap goal, the stock will top $2,000 based on the current number of shares outstanding.

As a group, Wall Street is split when it comes to the Tesla. Of the 46 analysts covering the stock who are tracked by S&P Global Market Intelligence, 15 say it's a Strong Buy, five have it at Buy, 17 call it a Hold, and 10 rate it a Sell or Strong Sell.

Needham analyst Chris Pierce is one of those with a Hold rating on the consumer discretionary stock.

"TSLA continues to demonstrate operational discipline and long-term leadership across electrification and energy storage, but we see the stock as fairly valued against our already aggressive longer-term full self-driving (FSD) and robotics estimates," wrote Pierce in an October 23 note.

The Riskiest S&P 500 Stocks Right Now

kiplinger@futurenet.com (Jeff Reeves) — Tue, 24 Jun 2025 10:00:00 +0000

(Image credit: Getty Images)

For many investors, the word that most appropriately describes 2026 is "uncertain." Variables include war in the Middle East and Ukraine, government trade policies, inflation and interest rates, stock market sentiment, and just about everything else.

In such an environment, many investors look for low-risk, low-volatility stocks. There is no one-size-fits-all approach to measuring a company's risk factors, but one helpful metric is "beta" – a calculation of historic volatility compared to the broad market.

Beta is expressed as a decimalized figure, and a reading of 1.0 means the stock or exchange-traded fund moves perfectly in line with the market.

Your favorite S&P 500 index fund has a beta of 1.0, considering it literally invests in the benchmark itself.

A beta that is lower than 1.0 means the stock moves less than the broader market. Sleepy consumer staples stocks such as General Mills (GIS) and The Campbell's Company (CPB) tend to have the lowest betas among S&P 500 stocks.

If the stock's beta is greater than 1.0, it is typically more volatile than the broad market – meaning it's capable of tremendous gains on the good days, but epic crashes when things go south.

With that in mind, we put together a list of the most volatile S&P 500 stocks as measured by their three-year annualized beta. This doesn't mean they are doomed to fail, as some have put up nice gains lately. But it does mean they rank as the riskiest S&P stocks to buy now and investors should proceed with caution.

Data is as of May 26.

Coinbase Global

(Image credit: Gabby Jones/Bloomberg via Getty Images)

Sector: Financials
Market value: $47.4 billion
Beta: 3.4

Coinbase Global (COIN) is a publicly traded crypto exchange listed on the Nasdaq and in good standing with major U.S. regulators. That makes it one of the most established and legitimate crypto platforms out there.

It has relationships with mainstream brokers and payment platforms, including Visa (V), which offers credit cards that pay rewards in crypto. So Coinbase is cozy with old-school banking and finance firms despite its innovative connections to digital assets.

At the same time, the financial stock typifies the volatility that, along with uncertainty, has defined the second Trump administration. COIN surged in the immediate aftermath of the November 2024 presidential election but plummeted alongside the broader market amid a chaotic rollout of new tariffs.

COIN rallied once again after the Senate passed the GENIUS Act – a law that aims to provide a regulatory framework for stablecoins. Shares have retreated once more in the second half of the year during a steep sell-off for the broader crypto industry.

Still, crypto's "time on the fringe" is likely ending and will be replaced "by an era of consistent regulation and expanding use-cases with the ultimate potential to supplant the traditional global financial system," says William Blair analyst Andrew Jeffrey.

Jeffrey adds that Coinbase will see an outsized impact from this shift, given its "leadership creates an inherent advantage."

Volatility and uncertainty will keep COIN on this list of riskiest S&P 500 stocks for the time being.

Palantir Technologies

(Image credit: Stefan Wermuth/Bloomberg via Getty Images)

Sector: Technology
Market value: $327.5 billion
Beta: 1.5

Palantir Technologies (PLTR) is down more than 23% year to date. But it was one of the best-performing S&P 500 stocks in 2025.

There's good reason for that, too, given that the intelligence community and the U.S. Department of Defense are long-term partners of the data analytics and artificial intelligence (AI) platform.

And there are many reasons to expect PLTR to be much more than a flash in the pan based on an AI fad. Indeed, Wall Street is calling for 73% annual revenue growth this year and 45% growth next year. Earnings per share are expected to surge, too.

However, history shows that some growth stocks can crash as hard as they climb. So investors should be aware of the high beta and volatility risk we see in PLTR before presuming this tech stock has nowhere to go but up.

Carnival

(Image credit: Getty Images)

Sector: Consumer discretionary
Market value: $38.8 billion
Beta: 2.3

Cruise ship operator Carnival (CCL) developed a reputation as a stand-in for the struggling travel industry writ large during the pandemic.

That made the consumer discretionary stock a prime target for day trading as speculators looked to turn quick profits on big moves related to macro trends involving tariffs, global trade and consumer spending.

But a longer-term look at CCL stock shows that it has a history of making big moves in either direction.

Looking at the price charts across the past 10 years or so indicates that Carnival shares have traded in a wide range of roughly $7 to $70 per share.

These days, CCL trades closer to $28, though many on Wall Street are betting CCL is poised for its next leg up. Indeed, the average price target among the 21 analysts following the stock who are tracked by S&P Global Market Intelligence is $34.01 – more than 20% above current levels.

But investors should be aware that this is definitely one of the riskiest S&P 500 stocks and there's no way of knowing for sure which way the wind will blow.

Tesla

(Image credit: David Paul Morris/Bloomberg via Getty Images)

Sector: Consumer discretionary
Market value: $1.67 trillion
Beta: 1.8

Most investors are familiar with the relationship between Tesla (TSLA) CEO Elon Musk and President Donald Trump.

And electric vehicles (EVs) are seen as a technology with a long-term runway, though Musk's work in Washington, D.C., disenchanted a large number of left-leaning consumers and public feuds with Trump risk alienating the other side of the aisle, too.

Tesla's share price was cut in half between December 2024 and March 2025 amid backlash to Musk's political ambitions. But TSLA rallied after Elon stepped down from his role at the Department of Government Efficiency (DOGE).

Excitement over the company's soft robotaxi launch in late June created additional tailwinds. And a late-November Tweet from the CEO about Tesla's AI chip ambitions sent the stock even higher.

Still, TSLA shares are generating interest now because the company is widely rumored to be destined for a merger with Musk's SpaceX. And the SpaceX IPO is on track to be the biggest initial public offering ever.

But buyers beware: Big price swings in either direction are why Tesla is on this list of the riskiest stocks in the S&P 500 right now.

Caesars Entertainment

(Image credit: Getty Images)

Sector: Consumer discretionary
Market value: $5.9 billion
Beta: 1.8

Casino icon Caesars Entertainment (CZR) operates brick-and-mortar gambling facilities, as well as online sports books, in 32 jurisdictions across North America.

Despite its domestic focus, the company has long been dependent on the gambling-friendly cultures across Asia to send along customers from abroad.

And amid rising tensions between the U.S. and its trade partners, which has negatively impacted travel from key markets such as China, CZR stock was down more than 30% in 2025.

It's been a different story so far in 2026, with the stock up more than 20% on solid digital growth and a rebound in Las Vegas.

And the company is now engaged in exclusive talks to be acquired by Fertitta Entertainment for $18 billion, or $32 per share.

Stifel analyst Steven M. Wieczynski maintains a Buy rating on the stock, though he recently lowered his 12-month target price from $36 to $35 due to uncertainty about CZR's future. "All investors care about at this point is will CZR still be a public company moving forward," Wieczynski writes, "and unfortunately, nobody still knows that answer."

Investors should remain on high alert given that CZR is one of the riskiest S&P 500 stocks right now. "Looking past the chatter that is circulating around CZR," the analyst concludes, "we continue to see real value in this name regardless of if they are taken private or remain a public entity."

Stock Market Today: Wall Street Is Standing By

David Dittman — Tue, 10 Jun 2025 20:05:24 +0000

Market participants, policymakers and others interested in the functioning of the global economy continue to monitor trade war negotiations between top representatives of U.S. President Donald Trump and Chinese President Xi Jinping.

U.S. officials offered more assurances of progress on key issues such as export controls on rare earth metals and semiconductors amid more all-day discussions with Chinese counterparts Tuesday.

After hopeful signs from a New York Fed consumer survey and ahead of the release of consumer and producer inflation data for May, small business optimism is up for the first time in 2025.

Still, markets remain most interested in the primary uncertainty introduced by President Trump on "Liberation Day" and the effort to walk back tariffs and other impediments to world commerce.

Trump said he's "only getting good reports" from Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer in London.

"We're doing well with China. China's not easy," the president told White House reporters Tuesday morning. "We're going to see," he responded to a question about China's restrictions on rare earth metals shipments.

"Unclear about whether tariffs will affect inflation more than growth," writes BMO Capital Markets Senior Economist Sal Guatieri, "the Fed appears content to hold to the sidelines until the economy shows clearer signs of weakness."

At the closing bell, the blue-chip Dow Jones Industrial Average inched up 0.3% to 42,866, the broad-based S&P 500 tacked on 0.6% to 6,038, and the tech-heavy Nasdaq Composite surged by 0.6% to 19,714.

Smucker gets jammed

J.M. Smucker (SJM) declined 15.6% after management of the food and beverage maker reported fiscal 2025 fourth-quarter earnings of $2.31 per share on revenue of $2.14 billion.

According to FactSet, Wall Street expected Smucker to post earnings of $2.24 per share on revenue of $2.18 billion. Smucker posted EPS of $2.66 on revenue of $2.21 billion a year ago.

The Sweet Baked Snacks segment, which includes Hostess brands that was acquired in 2023, posted a comparable sales decline of 14% and a profit slide of 72% for the full fiscal year.

Smucker, whose brands include Folgers coffee and Jif peanut butter as well as Smucker's jams, guided to fiscal 2026 EPS of $8.50 to $9.50 vs $10.12 for fiscal 2025. Revenue growth will slow to 2% to 4% from 7%.

CEO Mark Smucker said his company faces "a dynamic environment including evolving macroeconomic factors," citing record-high coffee costs, tariffs and other policy changes, as well as "consumers that continue to seek value."

Analysts score Trump vs Musk

Tesla (TSLA) is rebounding in fine style from CEO Elon Musk's apparent breakup with President Donald Trump, rising 5.7% Tuesday and extending its rally to 19.4% off its June 5 intraday low.

That's despite two analyst downgrades this week.

Senior Analyst Bill Selesky of Argus Research lowered his intermediate-term rating on TSLA to Hold from Buy.

Selesky emphasized, however, that long-term rating remains Buy, "as the stock appears to be currently trading on non-fundamental events, specifically the worsening tiff between the U.S. president and the world's richest man."

The analyst cites expiration of EV tax credits as another potential drag on demand for Tesla's cars, as well as AI-related projects such as Cybercab and Optimus as potential upside catalysts.

"We believe a near-term Hold rating is prudent at this time," Selesky concludes.

Baird analyst Benjamin Kallo cut TSLA stock to Neutral (or "Hold") from Outperform (or "Buy) for the same reason. Kallo kept his 12-month target price at $320.

"The recent incident between Musk and President Trump exemplifies key-person risk associated with Musk's political activities," Kallo observes.

Kallo notes that the public quarrel "may heighten questions regarding brand damage, which we expect will persist until sustained evidence of volume growth avails itself."

Optimism flows

This week's economic calendar gets really interesting with the Wednesday morning release of Consumer Price Index (CPI) data for May.

But with Monday's release of solid Survey of Consumer Expectations results from the New York Fed, Tuesday's report that the NFIB Small Business Optimism Index rose for the first time this year makes for solid bookends.

The NFIB index printed at 98.8 in May, up from 95.8 in April, with expected business conditions and sales expectations accounting for most of the gain.

The Uncertainty Index rose two points from April to 94 from 92. And 18% of respondents said taxes are their most important problem, up from 16%.

"Although optimism recovered slightly in May, uncertainty is still high among small business owners," said NFIB Chief Economist Bill Dunkelberg.

"While the economy will continue to stumble along until the major sources of uncertainty are resolved, owners reported more positive expectations on business conditions and sales growth."

Stock Market Today: Stocks Stable as Inflation, Tariff Fears Ebb

David Dittman — Mon, 09 Jun 2025 20:12:02 +0000

The Dow Jones Industrial Average climbed above the breakeven line shortly after the noon hour Monday, boosted by an intraday rally for what remained the index's worst-performing component during a relatively quiet early summer session on Wall Street.

The S&P 500 Index held on above the psychologically significant 6,000 level, and another strong day for technology stocks elevated the Nasdaq Composite.

Investors, traders and speculators saw good inflation signs in New York Fed Survey of Consumer Expectations data as they monitor progress on U.S.-China trade war negotiations.

National Economic Council Director Kevin Hassett said on CNBC that talks in London between top representatives of President Donald Trump and President Xi Jinping will likely result in a deal on rare earths and semiconductors before they move on to "smaller matters."

Hassett referenced the potential rollback of export controls on "other semiconductors which are also very important to China" apart from the "very, very high-end Nvidia chips" and expects "rare earths will be released in volume."

"The stock market's gains amid a steady stream of soft economic data last week suggested traders are willing to take a slowing economy in stride, as long as it doesn't slow too much," writes Chris Larkin, head of trading and investing at E*TRADE from Morgan Stanley.

Larkin notes that unless the numbers in Wednesday's release of Consumer Price Index (CPI) data for May "are a major surprise, US-China trade talks will likely assume the dominant role in shaping near-term momentum."

By the closing bell, the blue-chip Dow Jones Industrial Average was down 1.11 points to 42,761, the broad-based S&P 500 was up 0.1% at 6,005, and the tech-heavy Nasdaq Composite had climbed 0.3% to 19,591.

The well-traveled Dow Jones stock

Travelers (TRV) was the worst-performing Dow Jones stock Monday – it was down 3.9% less than 90 minutes after the opening bell, stayed in the red all day and closed with a loss of 2.2%.

But TRV did stage a 1.9% intraday rally to help lift the 30-stock index into positive territory. The insurance giant remains among those good stocks to buy to cope with inflation.

Indeed, TRV (a total return of 65.3%) has outperformed the Dow (37.9%) and the S&P (52.6%) and basically held serve with the Nasdaq (65.5%) over the trailing three years ending June 6.

Boeing (BA) was the No. 1 Dow stock Monday with a gain of 3.2%, the airplane maker in turnaround closing at its highest level since January 2024, according to Dow Jones Market Data.

BA is up 22.3% since reporting expectations-beating first-quarter earnings April 23. Boeing would also benefit from a continuing detente in the U.S.-China trade war, as tariffs make its jets unaffordable for Chinese customers.

Meanwhile, Nvidia (NVDA, +0.6%) extended its post-earnings rally and closed the gap on global market capitalization leader Microsoft (MSFT, +0.5%). NVDA is now up 5.1% since May 28.

Among other Mag 7 stocks, Amazon.com (AMZN, +1.6%), Alphabet (GOOGL, +1.5%) and Tesla (TSLA, +4.6%) were up in the market cap standings.

Apple (AAPL, -1.2%), with expectations somewhat subdued as its Worldwide Developer Conference gets underway, was the third-worst Dow Jones stock and one of only two Mag 7 stock to post a loss Monday.

Meta Platforms (META, -0.5%) was the other.

Inflation expectations ebb

The New York Fed's Center for Microeconomic Data reported Monday morning that inflation expectations have reversed their post-Liberation Day surge.

One-year-ahead inflation expectations declined by 0.4 percentage point to 3.2%, three-year expectations were down from 3.2% to 3.0%, and five-year expectations declined from 2.7% to 2.6%.

Results of the center's Survey of Consumer Expectations also show an improved labor market outlook. Median one-year-ahead earnings growth expectations were up to 2.7% from 2.5%, while mean unemployment expectations were down from 44.1% to 40.8%.

Thirty-day fed funds futures prices reflect a 99.9% probability voting members will hold interest rates steady at the next Fed meeting June 17-18. The probability of a rate cut at the July 29-30 meeting has declined from 60% on May 9 to 16.6%.

Stock Market Today: Good Feelings and Solid Data Lift Stocks

David Dittman — Fri, 06 Jun 2025 20:07:52 +0000

Equity futures and U.S. Treasury yields surged on incoming data showing the labor market remains "resilient" even amid down-trending sentiment survey results.

Meanwhile, reports of de-escalation in the burgeoning feud between President Donald Trump and erstwhile adviser Elon Musk provided an additional boost for the bulls on Jobs Friday.

They continue to turn May's rally into June's with fresh inflation data looming on Wednesday, early consumer survey results deadlining next Friday, and the Federal Reserve in a quiet period ahead of its upcoming policy meeting.

Tensions between the president and the Tesla CEO may or may not have eased – the White House would like to move on. But Trump, unbound by any "quiet period," continues to attack Fed Chair Jerome "Too Late" Powell.

"If 'Too Late' at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due," posted the president about 20 minutes after Friday's opening bell.

U.S. Treasury yields were higher across maturities, the 2-year up to 4.041% from 3.924% Thursday, the 10-year up to 4.506% from 4.395% and the 30-year up to 4.966% from 4.884%.

By the closing bell, the blue-chip Dow Jones Industrial Average was up 1.1% at 42,762, the broad-based S&P 500 had added 1.0% to 6,000, and the tech-heavy Nasdaq Composite was up 1.2% at 19,529.

Donnie vs Lonnie: who wins?

Tesla (TSLA) rebounded 3.7% Friday after its 14.3% crash Thursday and recovered about $50 billion of the $152 billion in market capitalization it lost.

Indeed, stocks to buy for a Trump presidency were up across the board.

And Trump Media & Technology Group (DJT) was up 3.9%.

"The most colorful story is the rift between President Trump and Elon Musk," muses Louis Navellier of Navellier & Associates, who recounts the Tesla CEO's journey from fanboy to critic as the president's "big beautiful bill" made its way through the House and to the Senate.

And "the rhetoric between the two got really heated" as TSLA stock fell from an intraday high of $355 Tuesday to an intraday low of $273 Thursday.

Other names in the Trump Industrial Complex, such as AI stock Palantir Technologies (PLTR, +6.5%), rose amid peace-for-now between Trump and Musk.

Beyond the battle between social media heavyweights with market-moving implications, according to Navellier, "What people are looking for is to see if the S&P can close above 6,000."

The index climbed as high as 6,016.87 within 15 minutes of Thursday's opening bell. "Clearly," Navellier concludes, "the trend remains positive."

Take these jobs

The Bureau of Labor Statistics said nonfarm payrolls increased by 139,000 in May, ahead of a consensus estimate of 130,000. As expected, the unemployment rate remained at 4.2%.

The BLS reported a net downward revision of 95,000 jobs for the previous two months, the March count down from 185,000 to 120,000, and April's count trimmed from 177,000 to 147,000.

Average weekly hours were unchanged at 34.3, while average hourly earnings increased from $36.09 in April to $36.24 in May. Average weekly earnings increased from $1,237.89 in April to $1,243.03 in May.

"It's clear that the economy remains resilient, with the job market holding up well," says Northlight Asset Management Chief Investment Officer Chris Zaccarelli.

Zaccarelli adds that the Fed "should be reluctant to cut rates because the full effects of tariffs haven't impacted inflation numbers yet and the job market isn't deteriorating enough to force their hand."

Raymond James Chief Economist Eugenio J. Alemán suggests the report "will appease market concerns about the U.S. labor market" and that "even after those large downward revisions, job growth remains healthy for now."

Echoing Zaccarelli, Morgan Stanley Wealth Management Chief Economic Strategist Ellen Zentner concludes that "continued labor market resilience could help the economy sidestep recession."

Stock Market Today: Tesla Drags on Stocks Amid Musk-Trump Feud

karee.venema@futurenet.com (Karee Venema) — Thu, 05 Jun 2025 20:05:28 +0000

Stocks struggled for direction Thursday as market participants awaited more details on tariff negotiations between the U.S. and its trading partners.

On Wednesday, President Donald Trump and Chinese President Xi Jinping held a roughly 90-minute phone call to discuss trade between the two countries.

In a post on Truth Social, Trump said it was "a very good talk," and the two "straightened out" some complexities centered on "rare earths" and "other things."

High-level representatives from the U.S. and China will meet again "shortly, according to Trump, to resume trade negotiations.

Signs of rising tensions between the two countries, following news of a short-term trade truce in mid-May, have sparked volatility in the markets.

And while today's price action was up and down, moves were much more modest than we've experienced in recent months.

At the close, the blue chip Dow Jones Industrial Average was down 0.3% at 42,319, the broader S&P 500 was off 0.5% at 5,939, and the tech-heavy Nasdaq Composite was 0.8% lower at 19,298.

Tesla sinks as Musk-Trump rift widens

Tesla (TSLA) was one of the biggest decliners on Thursday, spiraling 14.3% as the split between Trump and Elon Musk grew.

The Tesla CEO recently ended his cost-cutting efforts in Washington, D.C., in order to turn his attention back to his companies.

While Musk seemingly left on good terms with Trump, his recent criticism of the president's "big, beautiful" tax bill has shined light on a widening rift between the two.

For his part, Musk posted on X that the spending bill is a "disgusting abomination" that will bankrupt America.

Trump replied with his own post on Truth Social today, writing that he took away an "EV Mandate that forced everyone to buy Electric Cars," and Elon "just went CRAZY!"

Circle stock soars after IPO

Circle Internet Group (CRCL) had a strong first day of trading, opening at $69 on Thursday.

The stablecoin issuer priced its initial public offering (IPO) late Wednesday at $31 per share – above its prior range of $27 to $28 – and the crypto stock reached an intraday high of $103.75 before settling at $83.23.

Cryptocurrency is in an upswing right thanks to supportive measures from the Trump administration.

And CRCL could get an additional boost if Congress passes the GENIUS Act – a bill aimed at creating a regulatory framework for stablecoins.

The successful offering also bodes well for mobile banking platform Chime, which will price its upcoming IPO this Wednesday, June 11, according to Fortune, and begin trading on the Nasdaq under the ticker symbol "CHYM" on Thursday, June 12.

Jobless claims come in hot

Data from the Labor Department showed that initial jobless claims rose by 8,000 last week to 247,000, more than the 236,000 economists expected.

This is just the latest sign of a cooling labor market and comes ahead of tomorrow morning's release of the May jobs report.

The data are expected to show the U.S. added 125,000 nonfarm payrolls in April.

Job growth has been a tailwind for the U.S. economy, says Scott Helfstein, head of investment at Global X, and this makes Friday's report "particularly important in the battle of hard fundamental data versus high frequency survey data."

5 New Car Features That Don't Seem So Futuristic Anymore

Sean Jackson — Mon, 26 May 2025 10:01:30 +0000

Car features have come a long way.

Gone are the days when you needed a buddy system or flexible giraffe neck to help see enough to wedge into or out of tight spaces. Now, vehicles do the work for you — and not just when it comes to parking.

The most encouraging car innovation trends continue to emphasize safety. From forward collision warning and pedestrian detection to lane-keeping assist and blind-spot monitoring, today's vehicles are more protective than ever — and getting smarter every day.

These systems help drivers stay aware of their surroundings, prevent accidents and make driving less stressful. It's hard to imagine life before them — but it also makes us wonder: What else are we soon going to be taking for granted?

Here are five futuristic car technologies that are no longer reserved for luxury models and are becoming increasingly common on the road today.

1. Self-driving car technology

The concept of self-driving cars goes back to the 1920s.

Former U.S. Army electrical engineer Francis P. Houdina invented a radio-controlled car using a 1926 Chandler. Radio signals operated the car's motor and steering, while a second vehicle followed behind, transmitting the commands that guided the Chandler's movements.

We suspect that if Houdina were alive today, he'd be amazed to see how far things have come.

California-based Waymo is one of the first autonomous ride-sharing services. After conducting millions of miles of road testing and even more hours of simulation, the service offers a dependable and safe way to get around without you having to press your foot on the gas, steer, even make small talk with a driver.

Before introducing the service to a new city, the Waymo Driver takes in every detail, from signs and crosswalks to road orientation. Instead of using GPS to navigate, Waymo uses detailed, customized maps, artificial intelligence (AI) and real-time sensor data to ensure your ride is safe.

One of the biggest concerns with self-driving cars isn't the actual car, but other drivers on the road. Predicting the unpredictable can be next to impossible, but Waymo has found a way to make it work. It uses data gained from testing to predict how other drivers, pedestrians and other road obstacles will move. It factors in all possible paths in real time to avoid hazards and get you to your destination safely.

Currently, Waymo is only available in Phoenix, San Francisco, Austin and Los Angeles, with future launches slated in Miami and Atlanta. If you live in one of these cities, you can download the Waymo app and experience the future today. Pricing is similar to other rideshare apps and the service is slick and efficient, as you might expect from a robotaxi.

Other technology companies are rapidly moving into this space. Hyundai has recently announced a partnership with Avride to make its own fleet of robotaxis, and Elon Musk has announced that the first Tesla robocars will launch in June 2025 in Texas.

Driver assistance features in your car
Car manufacturers, meanwhile, are perfecting their own versions of advanced driver-assistance features — such as lane centering and hands-free highway driving — across more models and trim levels.

Ford BlueCruise is a driver-assistance feature that can steer, brake and accelerate while you enjoy your drive hands-free. Other car manufacturers such as General Motors, Tesla and BMW also have installed similar driver-assistance technologies.

All this shows that while self-driving cars — and the related technological advancements — are the future, you'll be able to experience it sooner than you think.

2. Biometric car keys

(Image credit: Hyundai USA)

Keys? Those are a thing of the past. But soon, key fobs might be gone.

For example, the 2025 Hyundai Genesis GV60 allows you to unlock your car with your face. All you need to do is touch the handle to activate the door-mounted camera, show the camera your pearly whites, and the door opens for you.

It doesn't stop there. Once you're inside the spacious and stylish cabin, you can start your vehicle using fingerprint authentication.

Hyundai isn't the only manufacturer offering this technology. Tesla has used biometrics for years. Their Model 3 and Model Y have a facial recognition camera that recognizes who's driving and sets preferences, such as seat location, cabin temperature and more.

Meanwhile, Subaru's DriverFocus uses an infrared camera to recognize and set driver preferences. It can also determine when a driver is distracted and alert them. It won't be long before more cars have this accessibility.

3. EV range choice, at last.

(Image credit: Kia)

One of the biggest car innovations concerns the EV market. Unveiled at the 2025 New York auto show, the 2026 Kia EV4 is a perfect example of how far electric vehicles have evolved.

"The 2026 Kia EV4 has two battery capacities, one that will run 300+ miles and another that will be in the 225 to 250 mile range," says Brian Moody, an executive editor with Autotrader. "A smaller range makes sense when the price is right."

This smaller range is in line with other EV models available now, which have average ranges of 235 to 300 miles per charge. What makes this so noteworthy is the fact that you, the customer, can choose. Unlike the Tesla Model 3, which comes with one battery option, the EV4 offers customers a choice of battery size, and the lower-range battery option comes at a lower-price entry point.

Along with flexibility in range choices, Kia expedites charging batteries. DC quick-charging takes you from 10% to 80% in 29 minutes with the light battery and 31 minutes for the Wind & GT-Line battery, with a 400V dedicated platform for EVs.

That's competitive, but generally slower than Tesla's superchargers, which can give their vehicles 150 to 200 miles of juice in 15 to 30 minutes. While Tesla currently leads in ultra-fast charging speeds, Kia is narrowing the gap. Expect to see more manufacturers offering different battery options for their EV models, giving customers more affordable entry points into the market.

4. Adaptive technologies

To get the best safety and technology features, you'd usually have to shell out some serious dough for an upgraded package, which "can cost between $2,500 to $5,000, and in some cases, up to $10,000," says Moody.

Adaptive technologies run the gamut from cruise control, hazard detection and accident prevention (applying emergency braking when hazards or pedestrians are detected.)

Subaru is one of the manufacturers bringing more of these features to more of its vehicles. One example is the installation of EyeSight on their manual sports cars.

Eyesight uses two front-facing cameras to scan the road for obstacles, pedestrians or anything else it deems a hazard. If it detects a hazard, the EyeSight technology can lower your car's cruise control speed or apply emergency braking.

Subaru's approach to offering more adaptive technologies in more models could signify a shift that other manufacturers follow, meaning you could have more top-of-the-line safety features without having to pay an upgrade fee.

Another nifty feature is AI voice assistants. Kia uses the SoundHound AI assistant, which they dub the "digital co-pilot" for your adventures. You can use the AI assistant to power certain car functions such as playing music, adjusting cabin temperature or getting directions.

As adaptive technologies grow and use more AI, you'll start seeing these features in more vehicles, even in base and midrange options.

5. AI-powered predictive maintenance

(Image credit: Getty Images)

Modern cars now come with a wealth of technological features to help you stay informed about your car’s health and performance.

For example, General Motors uses OnStar, which sends drivers a vehicle condition report every month. This report uses an easy-to-understand color code to flag key systems such as brakes, oil life, engine performance, transmission and tire pressure.

Any area designated in green means the part is in good shape. Yellow indicates you'll need service soon, while red requires prompt attention.

OnStar will also notify you when you need to bring your car in for service and can help you locate the nearest dealer. In 2025, all General Motors models come equipped with OnStar Basics, including Chevy, Buick and GMC.

While some vehicle manufacturers have had such features for a while, artificial intelligence (AI) is now taking vehicle maintenance to the next level.

AI predictive maintenance analyzes a range of data, including recalls, to determine if or when future problems could arise. It can predict when car parts will fail and alert you beforehand, so you can address problems before your vehicle breaks down.

Along with using historical data, AI analyzes real-time information gained from a vehicle's sensors to monitor engine, transmission, braking, steering and other performance components. This allows for more accurate diagnostics and timely alerts.

Altogether, AI can help properly diagnose any issues, or future issues, accurately — and it's more cost-efficient than traditional scheduled (or reactive) maintenance. Having this extra monitor not only makes your vehicle safer, it can extend its operating life, as well.

The bottom line

Car features have come a long way from rearview cameras. Features that once seemed futuristic, such as self-driving and adaptive technologies, are becoming more accessible every year.

EVs are also getting into the mix. Brands such as Kia are providing more ranges in their EV models to accommodate a growing base of prospective buyers, while biometric features help you start your vehicle with the push of a button.

As these innovations spread, they'll make even the most mundane commutes safer and more enjoyable.

Tesla to Launch FSD in Europe and China: What to Know

Joey Solitro — Thu, 05 Sep 2024 16:24:58 +0000

Tesla (TSLA) is one of the best stocks on the S&P 500 Thursday after the electric vehicle (EV) manufacturer announced it will launch its full self-driving (FSD) driver assistance software in Europe and China next year.

In a post on X, the social media platform formerly known as Twitter, Tesla announced that it would begin offering its FSD technology in Europe and China in the first quarter of 2025, pending regulatory approval.

A timeline for approval in both markets was not provided, but Tesla CEO Elon Musk said he expects the company to receive clearance by the end of 2024, according to CNBC. FSD is an upgrade to Tesla's Autopilot driver assistance system, which is currently available in Europe and China.

Is Tesla's robotaxi coming soon?

The FSD expansion news comes just one month before Tesla's unveiling of its robotaxi at an event on October 10. The event was originally scheduled for August 8, but was delayed because Musk wanted to make "important changes to improve the vehicle."

Anticipation around Tesla's robotaxi is a key driver of Ark Invest's $2,000 price target on the Magnificent 7 stock.

Is Tesla stock a buy, sell or hold?

Tesla has stabilized after a rough start to the year and is up nearly 21% in the last six months. Still, Wall Street remains hesitant to give the all clear.

According to S&P Global Market Intelligence, the average analyst target price for TSLA stock is $204.20, representing a discount of roughly 10% to current levels. Additionally, the consensus recommendation is a Hold.

Financial services firm Truist Securities is one of those with a Hold rating on Tesla stock, along with a $215 price target.

"Tesla's development has been a remarkable success story," said Truist Securities analyst William Stein in an August 13 note. "Overcoming obstacles in traditional, established, automotive & energy industries, Tesla developed innovative technology, built scale, and achieved industry-leading profitability."

However, Stein adds that he believes "the company's best days, in terms of volume production, product innovation, and, especially, artificial intelligence (AI) innovations, are still down the road."

Smart Ways to Invest Your Money This Year

kiplinger@futurenet.com (Jeff Reeves) — Sat, 13 Jan 2024 14:30:21 +0000

With the S&P 500 index of the largest U.S. stocks rising about 26% on a total return basis (price change plus dividends) in 2023, many folks are looking for smart ways to invest in 2024.

But as the old saying goes, past performance is no guarantee of future returns. It's important to take stock of the current economic environment as well as your personal risk tolerance before plowing your hard-earned cash into what's popular.

The good news is that there are plenty of smart ways to invest your money this year. In fact, for most investors with a modest amount of cash, it's easier than ever before to put just a few hundred dollars to work and improve your personal finances significantly.

Smart ways to invest your money: CDs

With the recent increase in interest rates, it's easier than ever before to tap into safe returns that are nearly guaranteed. One of the most rock-solid options out there is a CD, or certificate of deposit. CDs are similar to high-yield savings accounts – these vehicles are basically just bank accounts where you get a fixed rate of return – only can't withdraw your money before a deadline without penalty.

"For disciplined consumers, CDs can be a great way to set aside money while earning higher interest rates on their balances," writes Kiplinger contributor Seychelle Thomas in her feature on whether or not CDs make a good investment. "However, it's critical to have a readily accessible form of savings even if the rates aren't as high compared to a CD."

If you don't need your cash immediately, a 1-year CD can offer as much as a 5.5% return right now. Rates, minimum deposits and durations may vary, so make sure to shop around for the best option that fits for you.

Smart ways to invest your money: Bond funds

If you want more "liquid" interest-bearing assets that are low-risk, bonds are a good option. Bonds are investment vehicles where investors give some cash to governments or corporations in exchange for repayment plus interest. Think of it as you, the investor, acting as the bank, and getting paid for the service of loaning out your money.

Rather than do the research for individual bonds, many investors prefer bond funds – which can include both traditional mutual funds or bond ETFs (exchange-traded funds). Both of these options are baskets of hundreds or even thousands of bonds, offering built-in diversification and a structured way to invest your money on Monday but get it back out on Tuesday if you really need it.

The largest bond fund at present is the Vanguard Total Bond Market ETF (BND), with more than $300 billion in total net assets. As the name implies, it holds a wide array of bonds from corporate debt to U.S. Treasury bonds to mortgage-backed securities.

There are other more tactical options, but with almost 11,000 individual bonds in BND, you get easy access to the totality of this marketplace in a single holding. Right now, this Vanguard bond fund yields 4.3% – meaning the investment offers a slightly smaller rate of return than CDs, but more flexibility.

BND also trades as a mutual fund, the Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX). It requires a $3,000 initial investment.

Smart ways to invest your money for growth: Stocks

If CDs are all but guaranteed to give you your principal investment back, and bonds offer low volatility but more liquidity, stocks round out the list of smart ways to invest your money with a more aggressive but also potentially more profitable option to invest your money.

Stocks are investment stakes in publicly traded companies. And unlike the prior two options, stocks don't deliver a fixed rate of return. Instead, they generally deliver profits by appreciating in value based on those companies achieving better results.

The big success story many folks talk about is Tesla (TSLA). If you invested just $1,000 in its stock on the first day it traded back in 2010, you would have about $140,000 today! Of course, predicting future performance is easier said than done. There are plenty of horror stories, too. Some companies ultimately do go bankrupt and investors lose everything.

So, as with bonds, the safer route is typically to invest in a diversified basket of stocks via an ETF or mutual fund. The largest and most popular vehicle out there is the SPDR S&P 500 ETF Trust (SPY) with almost $500 billion in assets. Tied to the popular S&P index of the 500 largest U.S. stocks that includes Apple (AAPL) and other popular names, this S&P 500 ETF gives you exposure to the biggest companies on Wall Street in one holding that's easy to buy and sell.

Just remember that stocks are much riskier than bonds or CDs. So make sure you assess your own goals and risk tolerance before investing in SPY or any other stock market investment.

Tesla's Cybertruck Unlikely to Win Over Traditional Buyers: The Kiplinger Letter

Jim Patterson — Mon, 11 Dec 2023 22:10:43 +0000

To help you understand what's happening in the auto industry and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Despite the buzz surrounding the reveal of Tesla’s polarizing pickup truck, don’t expect huge sales of the edgy, stainless-steel Cybertruck. Tesla fans are likely to drive a surge of initial orders, but winning over traditional truck buyers is going to be a tall order.

Electric trucks generally suffer from limited driving range, especially when towing, a shortcoming Tesla does not appear to have solved. Plus, its truck’s unconventional design, made of stainless steel, will put off many buyers. Its design and construction also pose major manufacturing challenges for Tesla. Per one analyst, the Cybertruck is arguably the riskiest vehicle Tesla has attempted.

Even so, the electric truck market is already getting crowded. Ford, General Motors and Rivian have models on sale now, making Tesla something of a latecomer to the segment.

One coming electrified truck that might have a better shot of catching on is Ram’s plug-in hybrid Ramcharger, due in 2025. Ram is targeting a range of 145 miles on battery power before a gas engine kicks in to generate electricity. Its towing capacity is said to be up to 14,000 pounds, besting the Cybertruck’s 11,000.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

9 Best Green Energy Stocks to Buy Now

kiplinger@futurenet.com (Deborah Yao) — Tue, 21 Mar 2023 12:47:41 +0000

Green energy stocks got a lift thanks to the clean energy incentives in the Inflation Reduction Act of 2022 (IRA), along with the dual catalysts of rising demand and lower costs.

Rising demand driven by leading AI data center operators is now the No. 1 factor supporting green energy stocks, despite President Donald Trump's effort to eliminate renewable and electric vehicle (EV) tax credits.

As Deloitte explained in its 2024 renewable energy industry outlook, the IRA extended wind and solar tax credits for projects that started construction before 2025 through at least 2032.

But state-level clean-energy legislation has also provided a boost, with 22 states and Washington, D.C., targeting 100% renewable energy or 100% carbon-free electricity by 2040 to 2050.

In addition, 43 of the 45 largest U.S. investor-owned utilities have committed to reducing their carbon emissions by raising the use of renewables.

"We expect little impact to U.S. utility-scale solar demand from corporate sustainability goals with or without tax credits," writes UBS analyst Jon Windham in a recent note on energy intensity and electricity costs for leading AI data centers and the impact on electric utility stocks.

According to Windham's analysis, the loss of renewable tax credits would have minimal impact on operating margins across tech stocks. "A detailed review of their sustainability reports reveals continued deep commitment to carbon free energy sourcing," Windham concludes.

Reuters reported less than 10 days after the election that Trump's transition team planned to kill the $7,500 consumer tax credit for electric-vehicle purchases as part of broader tax-reform legislation that we now know as the "big, beautiful" bill.

Such a law would have a deep but disparate impact on the EV market. Most EV stocks continue to trade on simple supply and demand in an increasingly global market.

Meanwhile, the main driver is elsewhere: U.S. corporations' demand for clean power has surged 100-fold in the past decade, according to a recent report from the trade group American Clean Power, as solar and wind power costs have fallen substantially due to increased competition and efficiencies.

As S&P Global reported in a June 2024 note, "As of this year, corporate renewable procurement capacity continues to show momentum, with 15.8 GW (gigawatt) contracted in the first quarter, growing 36% year on year. Europe led in capacity, while the Asia-Pacific region led in the number of deals. In terms of countries, corporates have been particularly active in the U.S., Australia and India."

With that in mind, here are nine of the best green energy stocks for investors looking to profit on the still-growing trend toward sustainability.

Data is as of June 11. Price target data is provided by S&P Global Market Intelligence.

Sector: Industrials
Industry: Specialty industrial machinery
Market value: $132.0 billion
Median price target: $451.24 (6.7% implied downside)

The name "General Electric" does not exactly evoke the image of renewable energy. But the April 2024 division of the venerable industrial conglomerate's remains into two separate businesses has changed all that.

GE Vernova (GEV, $483.47) incorporates the old General Electric's operations in renewables, power, digital and energy financial services under the leadership of CEO Scott Strazik.

The spinoff accomplished GE's goal of dividing itself into three companies focused on energy, aviation and health care.

The other entity created a little more than a year ago, GE Aerospace (GE), includes the aviation assets. The spinoff of GE HealthCare Technologies (GEHC) was completed in early 2023.

Vernova's focus, Strazik says, is on addressing climate change and fostering sustainable development.

Its businesses include onshore wind turbines with rated capacities of two to six megawatts (MW) for different environments, offshore wind with six- to fourteen- MW capacities for tougher conditions, hydropower generation, hybrid renewable energy and storage, grid solutions and related solutions.

The Inflation Reduction Act provided a lift for Vernova, as it did for other green energy stocks, despite questions about its long-term viability in a second Trump administration.

As Morningstar analyst Joshua Aguilar noted at the time of the spinoff, "Favorable U.S. legislation provides a backdrop of more certainty around timing of wind-related projects, and a combination of better project selectivity, a focus on the North American market, and rightsizing should help drive the profits GE investors have long been clamoring for."

Since its spring 2024 debut on the New York Stock Exchange, GEV stock is up more than 255%.

Noting GE Vernova is "well positioned to capitalize on growing electricity demand" in a note on the stock's recent performance, Morningstar's Brett Castelli observes, "Shares are up nearly 50% year to date, handily outperforming the broad market, as outer-year financial expectations continue to increase."

Explaining that its current valuation "adequately reflects future revenue growth and margin expansion," Castelli concludes GEV shares are "overvalued following the rally in recent weeks."

Sector: Utilities
Industry: Utilities – renewable
Market value: $7.37 billion
Median price target: $28.46 (9.9% implied upside)

Brookfield Renewable Partners (BEP, $25.92) is a renewable energy company that operates hydroelectric, wind, utility-scale solar and storage facilities in North and South America, Europe and Asia.

Brookfield Renewable has a track record of investing in and operating high-quality renewable energy assets. It's part of Brookfield Asset Management, which manages more than $1 trillion in assets.

"The fundamentals for energy remain very strong, with digitalization and re-industrialization driving accelerating demand that far outpaces supply," management notes in its first-quarter interim report.

"This imbalance persists despite weaker market sentiment due to uncertainty of the impacts of tariffs globally. Despite this, renewables represent the most viable solution to meet the insatiable demand for energy given their low-cost position, mature supply chain and ability to be deployed quickly in almost any region"

Brookfield has also positioned itself to benefit from a renaissance in the nuclear power industry promised by Trump.

Brookfield and its institutional partners formed a strategic partnership with Cameco (CCJ) to acquire Westinghouse, one of the world's largest nuclear services businesses, for $7.9 billion in 2023.

According to Brookfield, nuclear power and hydroelectricity are "the only forms of clean, dispatchable, baseload power generation and will be a key enabler of the rapid growth of intermittent solar and wind."

Westinghouse services about half the global nuclear power generation sector and is the original equipment manufacturer to more than half of the global nuclear reactor fleet. Brookfield and its partners own 51% of Westinghouse, while Cameco holds 49%.

"Westinghouse is well positioned to capture the increasing global tailwinds for nuclear," according to Brookfield.

Sector: Consumer discretionary
Industry: Auto manufacturers
Market value: $1.1 trillion
Median price target: $299.14 (8.4% implied downside)

The share price of Tesla (TSLA, $326.43) surged in the aftermath of Donald Trump's victory in the 2024 U.S. presidential election, with CEO Elon Musk playing a prominent role in both the campaign and the transition period ahead of the January 20, 2025, inauguration.

TSLA suffered some as Musk acquired Twitter, turned it into X and extended his reach into social media and politics. His bet on Trump — "a poker move for the ages," according to Dan Ives of Wedbush Securities — appears to another volatile venture.

The Trump administration plan to eliminate tax credits for EV purchases would likely benefit Musk's company, as Kiplinger's Kelley Taylor writes. "Tesla representatives have expressed support for ending the subsidy to Trump's transition committee. This may seem counterintuitive but seems to align with CEO Elon Musk's previous statements."

Still, TSLA has traded as high as $429.80 (January 15) and as low as $214.25 (April 7) so far in 2025.

Some of that price action is about Tesla's operational progress, including the anticipated release of its robotaxi. A lot of TSLA volatility is simply about CEO Elon Musk and his up-and-down relationship with Trump.

One of the largest battery electric vehicle automakers in the world, Tesla is well positioned to grow its solar panel and storage businesses in similar fashion.

But Tesla stock has other drivers now.

"We believe Trump in the White House changes the landscape for Elon Musk and Tesla," Ives said during a post-election appearance on CNBC.

Ives said then Musk's "major strategic bet" could prove "very bullish for Tesla’s AI/autonomous story."

Reflecting his bullish view on Trump's victory and its potential impact on Musk's company, Ives raised his price target for TSLA from $300 to $400.

Ives has raised that target as high as $550 in 2025. He's also cut it as low as $315 amid a "massive feud over social media" between the CEO and the president.

"The vast majority of valuation upside for Tesla depends on the success of its autonomous vision," Ives emphasized in a June 6 note. "Therefore, a cooperative relationship with Trump will be essential for securing the federal framework needed to support that vision."

Ives believes Tesla has a path toward a $2 trillion valuation driven by full self-driving, widespread adoption of autonomy, and the U.S. rollout of its Cybercab service.

Sector: Utilities
Industry: Utilities – regulated electric
Market value: $150.7 billion
Median price target: $80.71 (10.6% implied upside)

NextEra Energy (NEE, $73) is typically found on lists of the best green energy stocks to buy.

The world's largest producer of wind and solar energy, NextEra also owns Florida Power & Light, the biggest electric utility in the U.S., providing clean electricity to more than 12 million people.

It's a corporate leader in sustainability, having been awarded the S&P 500 Global Platts 2020 Energy Transition Award for ESG leadership.

The utility stock was a primary beneficiary of the IRA, which CEO John Ketchum described as "transformational for our industry and our business" when it was passed.

Ketchum and NextEra Energy expected tax credits for wind, solar and storage to remain in place. But management continues to find ways to grow its business.

NextEra Energy Resources continues to add new renewable and storage projects to its backlog.

Management also completed agreements with two Fortune 50 customers for the potential development of renewables and storage projects totaling up to 10.5 gigawatts between now and 2030.

NextEra Energy Transmission has also secured contracts to build transmission projects in the PJM Interconnection, California Independent System Operator and Southwest Power Pool footprints that will roughly double the size of its transmission investments. Management expects rapid growth in electricity demand from data centers supporting generative AI.

Highlighting the opportunity that increased power demand is bringing to the utility sector, management said NextEra "will be disappointed if we are not able to deliver financial results at or near the top of our adjusted earnings per share expectations ranges each year through 2027, while maintaining our strong balance sheet and credit ratings."

NEE has enjoyed a solid 2025 despite the political uncertainty of the IRA, rising 3.5% amid surging data-center demand for power and outperforming the S&P 500 year to date.

NextEra is also one of the best dividend stocks, with Ketchum saying the company expects to raise its dividend by 10% a year through "at least" 2026.

Sector: Technology
Industry: Solar
Market value: $734.7 million
Median price target: $12.97 (18.1% implied upside)

Canadian Solar (CSIQ, $10.98) has had a rough couple of years but remains one of Wall Street's best green energy stocks for the long term.

CSIQ is a solar power company that provides integrated solutions that include solar-power products, services and systems. It's one of the world's largest makers of solar photovoltaic products, as well as one of the largest solar-power plant developers. Canadian Solar sells to utilities, businesses and consumers.

Canadian Solar says it's delivered more than 125 GW of solar modules to thousands of customers in more than 160 countries with another 26 GW of solar projects and 56 gigawatt hours (GWh) of storage projects in the pipeline.

A combination of high interest rates making new projects prohibitively expensive plus policy changes at the state level has limited growth in residential solar demand.

Changes to California's Net Energy Metering program and similar moves by other states reduced financial incentives for going solar. With those impacts now priced in, the Solar Energy Industries Association forecast annual growth for the residential solar market will average 9% from 2025 through 2030.

CSIQ's revenue has doubled since 2019, from $3.2 billion to $6.5 billion for fiscal 2024.

The share price reached a multiyear low in April amid the broader post-"Liberation Day" stock market sell-off and the aftermath of another less-than-stellar earnings report.

CEO Shawn Qu remains optimistic. Noting operational and financial headwinds created by "intense" competition and ongoing policy and trade-related uncertainty, Qu said in the company's fiscal 2024 fourth-quarter earnings announcement that Canadian Solar's modules business helped it "maintain relatively stronger profitability compared to the broader market."

Qu added that the green energy stock remains "fully committed to the U.S. market" and continues to expand solar module, solar cell and energy storage manufacturing capacity at three facilities.

Sector: Technology
Industry: Solar
Market value: $1.2 billion
Median price target: $15.40 (26.1% implied downside)

SolarEdge Technologies (SEDG, $20.83) is featured among the best green energy stocks because it's the largest maker of solar inverters. Solar inverters convert direct current from solar panels into alternating currents used in homes and electrical grids.

According to Morningstar analyst Brett Castelli, SolarEdge's DC optimizer is the leader in solar residential rooftop installations; the company has expanded its sales to include business and utility clients.

Because a majority of the company's revenue comes from Europe, SolarEdge was well-positioned to navigate a slowdown in U.S. residential solar demand "as California NEM 3.0 takes effect," Castelli said in a research note.

California's Net Energy Metering (NEM) policy calls for homeowners to get credit when their solar panels push excess electricity onto the grid when the sun is shining. This credit offsets the cost of electricity they use at nightfall.

Under NEM 3.0, the rates homeowners receive are 75% lower than before. This means less savings for the homeowner and a drag on solar panel sales.

Beyond inverters, SEDG has expanded into e-mobility and uninterrupted power supply markets. The analyst notes that e-mobility might be a big and growing market, but it requires more capital, carries execution risk and takes a long time to generate meaningful revenue.

It was a difficult 2024 for SolarEdge stock, which shed nearly 75% of its value before CEO Zvi Lando announced his resignation in August.

SolarEdge named a new CEO, Shuki Nir, in December. Nir had been the company's chief marketing officer since June 2024.

The appointment followed a November 28 announcement that SolarEdge closed its utility-scale battery storage division to focus on solar photovoltaics (PV) and cut its employee headcount by about 12%.

The green energy stock has responded, rising more than 50% in 2025.

Castelli says SolarEdge will suffer less harm than other solar companies from legislation that would eliminate rooftop solar incentives and accelerate the phaseout of other renewables incentives.

Sector: Consumer discretionary
Industry: Auto manufacturers
Market value: $47.9 billion
Median price target: $54.15 (8.6% implied upside)

Why is General Motors (GM, $49.87) on this list of the best green energy stocks to buy? Because the carmaker is going all in on an electric future.

The company said that it plans to invest $35 billion in electric vehicle and autonomous vehicle (AV) production through 2025. By mid-decade, GM plans to sell a million EVs a year in North America.

GM also deepened its investment in AV company Cruise, buying SoftBank's stake for $2.1 billion and pouring in another $1.4 billion. Cruise develops self-driving cars for ridesharing and delivery.

In December, GM announced a plan to scrap the Origin robotaxi project and combine Cruise with its existing technical teams for a focused effort on autonomous and assisted driving

GM, which sells vehicles under the Chevrolet, Buick, Cadillac, Baojun and Wuling brands, also jointly developed its Ultium battery platform with South Korea's LG Energy Solution to mass produce battery cells.

GM is projecting that its next-gen Ultium packs will cost 60% less than existing batteries in use today with double the energy density. GM is reusing or recycling these batteries.

GM continues to transition to a fully electric future and still plans to phase out gas and diesel engines and offer only EVs by 2035.

Its strategy involves significant investment in EV technology, infrastructure and manufacturing.

Sector: Consumer discretionary
Industry: Internet retail
Market value: $2.3 trillion
Median price target: $239.22 (12.2% implied upside)

E-commerce giant Amazon.com (AMZN, $213.20) joins the list of green energy stocks to consider because it is far and away the largest buyer of clean energy in the U.S., according to trade group American Clean Power.

"Corporate buyers are a critical part of the energy transition" in America from fossil fuels to clean energy, the trade group's report said.

"Their accelerated buying of clean energy provides an important source of demand, while their efforts to decarbonize their products and services puts pressure on their supply chain to do the same."

In 2023, Amazon invested in more than 100 new wind and solar projects. Its renewable power purchase agreement capacity in 2024 was 34 GW.

Once its more than 500 wind and solar projects are operational, Amazon expects to produce 77,000 GWh of clean energy on an annual basis, enough to power 7.2 million homes.

Moreover, Amazon said it is on track to meet its 100% clean energy goal five years earlier than the 2030 it previously projected.

What's more, Amazon co-founded The Climate Pledge in 2019, which commits companies to achieving net-zero carbon emissions by 2040 or a decade earlier than the Paris Agreement.

Sector: Utilities
Industry: Utilities – renewable
Market value: $18.1 billion
Median price target: $13.17 (8.5% implied downside)

Ørsted (DNNGY, $14.40) is the largest multinational power company in Denmark. After selling its oil and gas fields in 2017, the company is now focused on renewables.

The company develops, constructs and operates wind farms, solar farms, energy storage facilities, renewable hydrogen and green fuels facilities and bioenergy plants.

Ørsted operates 9.9 GW of offshore wind farms, with the biggest concentration of operations in the U.K.

It has the largest portfolio of offshore wind farm projects in Europe and continues to ramp up its American presence.

Ørsted owns and operates the first U.S. offshore wind project, the Block Island Wind Farm, which replaced five diesel generators and now powers 17,000 homes in Rhode Island.

It's developing 5 GW of offshore wind capacity in Connecticut, Maryland, New Jersey and New York, as well as 4 GW of onshore wind, solar and storage projects in Texas, the Midwest and the Southeast.

In addition to being one of Wall Street's best green energy stocks, DNNGY was also named the world's most sustainable company in 2022 by Corporate Knight's 2022 Global 100 Index.

Stock Market Today: Stocks Brush Off Disappointing Tesla Investor Day

karee.venema@futurenet.com (Karee Venema) — Thu, 02 Mar 2023 21:15:12 +0000

The first half of Thursday looked a lot like Wednesday for investors. The Dow Jones Industrial Average outperformed its peers, this time on a solid earnings reaction for Salesforce (CRM). Meanwhile, the S&P 500 and Nasdaq Composite lagged as Treasury yields remained elevated and Tesla (TSLA) shares sold off after the company's Investor Day. However, all three benchmarks moved higher in late-afternoon trading thanks to some dovish Fed talk.

The 9 Best Healthcare Stocks to Buy

Salesforce was the best of the Dow stocks today, adding 11.5% after the software-as-a-service (SaaS) firm reported earnings. In its fourth quarter, revenue jumped 14% year-over-year to $8.4 billion, and earnings per share doubled to $1.68. Both figures came in above estimates. CRM also gave higher-than-expected current-quarter and full-year guidance.

On the other hand, Tesla stock fell 5.9% after the electric vehicle maker unveiled its "Master Plan 3" at last night's Investor Day. The company discussed a host of initiatives, including eliminating reliance on fossil fuels in part by "improving the energy density of batteries" and seeing "all transportation go fully electric," said CEO Elon Musk. Tesla is also focused on "rethinking manufacturing again," which it believes could result in a 30% improvement to efficiency.

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Additionally, TSLA said that its goal to sell 20 million vehicles annually by 2030 – up from roughly 1.3 million in 2022 – will require a $175 billion investment. The carmaker confirmed it is building a factory in Mexico and said it is bringing its Cybertruck to the market this year, but failed to give details on any new models of vehicles it is adding to its lineup.

"Investors were underwhelmed, hoping to hear more than just a review of past achievements or the longer-term vision," says Greg Bassuk, CEO at AXS Investments. "Rather, they were listening intently for more meat on the bones regarding Tesla's concrete 2023 plans to remain competitive in an increasingly crowded and price-sensitive EV market."

While the major indexes spent most of the day mixed, mid-afternoon comments from Atlanta Fed President Raphael Bostic, who said that he is "firmly in the quarter point [interest rate] move" for the next Fed meeting, had them all closing higher today. The Nasdaq finished up 0.7% at 11,462, the S&P 500 rose 0.8% to 3,981, and the Dow added 1.1% to 33,003.

Prepare for more stock market volatility

It wasn't only single-stock and central bank news making headlines today. On the economic front, weekly jobless claims unexpectedly declined last week (-2,000 to 190,000). The Labor Department also upwardly revised fourth-quarter unit labor cost growth – a measure of inflation – to 3.2% from 1.1% as was initially reported in early February.

"Economic data remains the investor narrative for March," Bassuk says. "Just as the February selloff was sparked by the strong January jobs report and a multitude of robust growth and inflation readings, Wall Street and Main Street eagerly await upcoming economic data to decipher the trajectory of the job market and inflation to gauge the likely actions of the Fed in March and throughout 2023." And unless we see economic data weaken, "stocks look increasingly susceptible to a potentially intense pullback in March."

Thankfully, low-volatility strategies offer investors a way to hedge their portfolios against a market downturn. Whether it be through the best low-volatility stocks or the best low-volatility ETFs, these picks can help balance out a portfolio during periods of instability.

Stock Picks That Billionaires Love

Top 10 Electric Cars in the US — Most Popular EVs

ellen.kennedy@futurenet.com (Ellen B. Kennedy) — Wed, 15 Feb 2023 18:41:53 +0000

EV car sales have skyrocketed in the U.S., even as overall US car sales remained flat. It’s a trend that's impossible to ignore — that the future of cars is electric. According to Cox Automotive, in Q2 2024, sales of electric vehicles accounted for 8% of the total automotive sales, up from 7.2% during the same period last year. Much of that growth is thanks to California, as shown in the graph below.

(Image credit: Veloz)

Sales are forecasted to keep increasing, as will charging infrastructure. The electric vehicle market is set to surpass 691.56 billion by 2028, according to a recent report published by Extrapolate. And Goldman Sachs Research forecasts that electric vehicles will make up half of all global car sales by 2035. In only eight years, there will be more public EV chargers than gas stations in the U.S., according to Bloomberg.

This massive increase in sales interest can be attributed to several factors including the cost of fuel, as gas prices remain relatively high, improved EV performance, more choice of cars, and of course, government incentives. The federal EV tax credit) — part of the Inflation Reduction Act that passed in August 2022 — is designed to encourage the use of “clean” vehicles. The act includes a $7,500 credit for people buying electric cars and extends the tax credit to 2032. The exact amount of the credit is based on a calculation that considers factors like the vehicle’s sourcing and assembly. Many states and public utilities also offer incentives for EVs and home charging systems.

An EV/electric vehicle does everything a gasoline car does — gets you around, operates the air conditioning, plays music — but uses stored battery power. Unlike hybrid cars, EVs do not burn any gasoline. Most people charge their vehicles at home, and many can achieve a "full tank" of charge overnight.

Read on to find out the 10 most popular electric vehicles sold in the U.S. over the past quarter. We've noted the range, the average starting price and if the vehicle is eligible for the $7,500 point-of-sale tax credit (now taken at the dealership). If you are interested in one of the models that des not qualify for the tax credit, remember that you can still get this advantage through the EV lease tax-credit loophole. We also include the "miles per gallon electric," or MPGe, which estimates how many miles you could travel in an EV on the equivalent energy use of one gallon of gas.

Units Sold: 101,301

Starting at: $44,630

Amount of available tax credit off starting price: $7,500 (for models under $80,000 MSRP)

EPA Fuel Economy MPGe (max): 117

EPA Range (max): 310 miles

With one of the best charging networks, high performance, and a minimal but luxurious interior, the Tesla Model Y is hugely popular. The Model Y became the top-selling car globally in 2023. That's the best-selling car — period — not just the best-selling EV. The car also won a "Top Safety Pick+" (the highest designation) for safety from the Insurance Institute for Highway Safety (IIHS).

Units Sold: 42,710

Starting at: $40,630

Amount of available tax credit off starting price: $7,500 for Performance model only

EPA Fuel Economy MPGe (max): 132

EPA Range (max): 342 miles

The Tesla Model 3 was originally released to be a more affordable option for buyers. Even with the "cheapest" price tag, the Tesla 3 still packs a punch. Sales of this entry-level Tesla are down 26% year-over-year for the second quarter of 2024. Some of the headwinds stem from competition from other EVs entering the market and consumers giving hybrid cars a second look.

Units Sold: 12,645

Starting at: $39,995

Amount of available tax credit off starting price: $0

EPA Fuel Economy MPGe (max): 111

EPA Range (max): 320 miles

The Mustang Mach-E is the first out of two Fords on our list. The Mach-E doesn't fit the "sporty" appeal of other past Mustang releases, but underneath, this EV packs up to 480 horsepower still giving you that classic Mustang feel when you put your foot down. Best yet? Under an agreement with Tesla in 2023, Ford EVs may charge up at Tesla Supercharger stations, though drivers must order an adapter from Ford.

Units Sold: 11,906

Starting at: $39,950

Amount of available tax credit off starting price: Currently $0, but once these cars roll off the new manufacturing facility in Georgia later in 2024, they will be eligible for $7,500.

EPA Fuel Economy MPGe (max): 114

EPA Range (max): 303 miles

The Hyundai IONIQ 5 has one of the most novel designs of any vehicle on this list. It is one of the first EVs to offer vehicle-to-load (V2L), or the ability to tap the car's big battery for charging appliances. You may want to power your cellphone, coffee maker or refrigerator in the event of a hurricane or other disaster, or you may just want to take the car glamping. The car is rated a "Top Safety Pick+" by IIHS. The Hyundai Ioniq 5 also has one of the fastest charging speeds of any EV, juicing up from 10% to 80% in under 18 minutes at a level 3 (DC) 350 kW charger.

Units Sold: 8,755

Starting at: $60,990

Amount of available tax credit off starting price: $0

EPA Fuel Economy MPGe (max): Not available

EPA Range (max): 340 miles, or 470 miles with optional range extender pack

You either love the futuristic design of this truck, or you'd prefer a more traditional model like the Ford F-150 Lightning (number seven on our list). The Cybertruck has V2L capability, meaning you can charge appliances at any of the 110 or 220-volt outlets. The back seats in the Cybertruck have a touchscreen. The truck also has a suspension system that adjusts automatically to terrain and other advanced-tech features.

Units Sold: 8,137

Starting at: $69,900

Amount of available tax credit off starting price: $3,750 for models with an MSRP under $80,000

EPA Fuel Economy MPGe (max): 73

EPA Range (max): 400

This three-row electric powerhouse is Rivian's cool answer to the minivan. As you would expect from a family car, it has excellent safety features, garnering a "Top Safety Pick" award from IIHS. With four different battery sizes and multiple trim levels, there are 20 variations of this SUV, so do your research to get the exact car you want. As InsideEvs notes, this car's efficiency is a surprise; the largest battery pack, which should guzzle the most electricity per mile driven, is, in fact, the most efficient one. Rivian owners may access part of the Tesla Supercharger network using a special adapter.

Units Sold: 7,902

Starting at: $62,995

Amount of available tax credit off starting price: $7,500 for models with MSRP under $80,000

EPA Fuel Economy MPGe (max): 70

EPA Range (max): 320 miles

The F-150 Lightning wasn't the first electric truck to hit the road, but after its reveal in 2021, Ford received over 200,000 reservations. Since then, it has continued to be the top-selling EV truck. Under an agreement with Tesla in 2023, Ford EVs may charge up at Tesla Supercharger stations, though drivers must order an adapter from Ford. One of the downsides of this truck is its lackluster safety rating.

Units Sold: 7,571

Starting at: $43,070

Amount of available tax credit off starting price: $0

EPA Fuel Economy MPGe (max): 119

EPA Range (max): 252 miles

Though several reviews for this car have been "meh," it is picking up in popularity, with a 286% rise in year-over-year Q2 sales, according to Kelly Blue Book data. Toyota ramped up hybrid cars and delayed a vigorous adoption of a full-EV lineup. This strategy looked pretty smart when EV sales cooled in the last two quarters, but the company has some catching up to do now that EV sales are back on track.

Toyota's BZ4X sits within a crowded lineup of electric SUVs and crossovers. Compare this model to the Tesla Model Y, the Volkswagen iD.4, the Hyundai Ioniq 5 the Subaru Solterra and the Kia EV6.

Units Sold: 7,294

Starting at: $57,195

Amount of available tax credit off starting price: $7,500 off models with an MSRP below $80,000

EPA Fuel Economy MPGe (max): 88

EPA Range (max): 308

This SUV from Cadillac comes with 500 horsepower and interior luxury called "opulent" in a review by Inside Hook. The car also offers a quiet ride, excellent seat comfort and excellent range. The one downside according to InsideEVs is that its DC fast charging time is a bit slower than the Tesla Model Y and some other competitors.

Units Sold: 7,066

Starting at: $52,200

Amount of available tax credit off starting price: $0

EPA Fuel Economy MPGe (max): 120 (for eDrive 35)

EPA Range (max): 318

The BMW i4 earned a perfect score from Car and Driver editors, who praised the car's comfort, sporty driving and traditional design. If you want an EV wrapped in a classic "normal" coupe style, this is a great option.

Stock Market Today: Stocks Slump On Interest Rate Worries

dan.burrows@futurenet.com (Dan Burrows) — Thu, 09 Feb 2023 21:10:00 +0000

The market was positive in early trading Thursday, helped by a slate of positive corporate news from the likes of Walt Disney (DIS), Telsa (TSLA) and AstraZeneca (AZN). But the major benchmarks lost ground once again as worries about rising interest rates more than offset upbeat developments from some of the market's biggest and best-known names.

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On Thursday it was Federal Reserve Bank of Richmond President Thomas Barkin's turn to throw water on any hopes for a more dovish turn in monetary policy. The Fed official reiterated in an interview the importance "staying the course" in order to return inflation to the central bank's 2% target.

With anxiety rising about the possibility of a Fed-induced recession, stocks reversed course even as a number of companies reported upbeat news.

Dow component Walt Disney beat Wall Street's earnings estimates and said it would cut costs dramatically. The company announced a plan to eliminate about 7,000 jobs, ending its fight with activist investor Nelson Peltz's Trian Partners. Additionally, Disney CEO Bob Iger said he would ask the board to reinstate the dividend, which was suspended in early 2020 because of the COVID-19 pandemic.

Shares in Disney gained more than 5% at one point in early trades, but faded late in the session to finish down 1.3%.

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Elsewhere, Tesla (+3.0%) caught a bid after CEO Elon Musk said the electric-vehicle company's "Master Plan 3" would be unveiled at the company’s annual meeting on March 1. Pharmaceutical giant AstraZeneca (+4.8%) did its part to help lift traders' spirits by offering a strong 2023 fiscal outlook.

By the closing bell, however, the Dow Jones Industrial Average fell 0.7% to 33,699, while the broader S&P 500 declined 0.9% to 4,081. The tech-heavy Nasdaq Composite lost 1.0% to finish at 11,789.

Stocks With the Highest Yields in the S&P 500

Blue-chip dividend stocks never go out of style – at least not for patient investors. After all, the best Dow dividend stocks have a habit of outperforming the broader market when it's in a funk. The best dividend stocks for long-term dividend growth have likewise worked well during the current bear market.

But equity investors with shorter horizons probably want names with higher dividend yields. That's where the stocks with the highest yields in the S&P 500 come in. These names boast yields of more than 6% to greater than 11% – and have the imprimatur of the main U.S. equity benchmark to boot.

Stocks With the Highest Dividend Yields in the S&P 500

Stock Market Today: Stocks Climb After Tesla Earnings, GDP

karee.venema@futurenet.com (Karee Venema) — Thu, 26 Jan 2023 21:15:09 +0000

A choppy start for stocks on Thursday led to a solid finish as investors mulled over the latest batch of quarterly earnings and economic reports.

Tesla (TSLA) headlined a busy earnings calendar – and Wall Street cheered the electric vehicle maker's fourth-quarter results. Meanwhile, the latest gross domestic product (GDP) reading showed the U.S. economy grew at a faster-than-expected pace in the final three months of 2022, even as interest rates increased and inflation remained stubbornly high.

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Tesla released its Q4 results late Wednesday, sending shares up 11% today. The company reported earnings of $1.19 per share on $24.3 billion in revenue – both record figures for TSLA. Consensus estimates were for earnings of $1.13 per share on $24.7 billion in sales. The carmaker also said it plans to "grow production as quickly as possible" in order to meet its target of 50% average annual growth.

As for today's economic data, the Bureau of Economic Analysis said this morning that GDP grew at an annual rate of 2.9% in the fourth quarter, a quicker pace than what was seen in the third quarter. However, consumer spending slowed, rising 2.1% in Q4 vs. 2.3% in Q3.

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Wall Street's top minds were quick to chime in on the GDP, including Carol Schleif, chief investment officer at BMO Family office. "Thursday's GDP report suggests that the economy is relatively strong even in the face of aggressive measures by the Federal Reserve to calm inflation," Schleif says. "Businesses and consumers are moderating their spending after the initial exuberant post-pandemic surge and we expect this slowing of momentum to allow the economy to tick along solidly but on a slower and more sustainable path."

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At the close, the Nasdaq Composite was up 1.8% at 11,512, the S&P 500 was 1.1% higher at 4,060, and the Dow Jones Industrial Average had gained 0.6% to 33,949.

Chevron Unveils $75 Billion Buyback Program

Chevron (CVX) was one of the best Dow Jones stocks today – second only to Salesforce (CRM, +5.7%) – climbing 4.8% after the energy giant unveiled a massive share repurchase program. Specifically, CVX said its board of directors approved $75 billion in stock buybacks, with the program set to go into effect on April 1. The oil giant – well-known as being one of the best dividend stocks on Wall Street – also hiked its quarterly payout by 6% to $1.51 per share.

CVX's announcement and subsequent share-price move made energy the best-performing sector today (+3.2%), but this is just more of the same. Year-to-date, the energy sector is up more than 6%, building on 2022's impressive gains.

And there are plenty of potentially positive catalysts for oil stocks over the next few months, which could keep the wind at their back. These include China's reopening, the Biden administration ending the release of strategic petroleum reserves, and rising demand in the spring and summer months, says Louis Navellier, chairman and founder of Navellier & Associates. Continued gains could certainly benefit the best energy stocks, while energy ETFs would also reap the rewards.

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Stock Market Today: Stocks Climb After Spotify Job Cuts

karee.venema@futurenet.com (Karee Venema) — Mon, 23 Jan 2023 21:15:31 +0000

Tech stocks led the way higher Monday as investors prepared for a heavy batch of corporate earnings reports due out this week.

Roughly 20% of S&P 500 companies will release their quarterly results over the next five days, with tech giant Microsoft (MSFT, +1.0%) and electric vehicle maker Tesla (TSLA, +7.7%) among the notable names on this week's earnings calendar. But, the focus was on a big layoff announcement from audio streaming service Spotify (SPOT, +2.1%).

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Today, Spotify said it will lay off 6% of its global workforce, or around 600 employees. In a memo sent to staff, CEO Daniel Ek said the job cuts were an effort to bring costs in line amid a challenging economic environment. This follows in the footsteps of several other tech and communication services companies like Microsoft, Meta Platforms (META, +2.8%) and Alphabet (GOOGL, +1.8%) that recently announced layoffs.

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Salesforce (CRM, +3.1%) was another big gainer today after a report in The Wall Street Journal indicated Elliott Management has taken a "big stake" in the software-as-a-service (SaaS) company.

Semiconductor stocks were also a pocket of strength. Advanced Micro Devices (AMD, +9.2%) outpaced its peers after Barclays analyst Blayne Curtis upgraded the stock to Overweight from Equal Weight, the equivalents of Buy and Hold, respectively. Curtis said AMD's Genoa and Bergamo platforms will likely take market share away from Intel (INTC, +3.6%), and believes the company could get a boost once Facebook parent Meta Platforms ramps up spending later this year.

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As for the major indexes, the tech-heavy Nasdaq jumped 2.0% to 11,364, the broader S&P 500 gained 1.2% to 4,019, and the blue-chip Dow Jones Industrial Average rose 0.8% to 33,629.

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Today's price action likely sparked a sigh of relief among investors. However, the fact remains that the major benchmarks are still in a bear market. And amid expectations that the U.S. will enter a recession later this year – Kiplinger, for its part, has the odds of a recession at about 60% – stocks could stay in a downtrend for the time being.

While it's true that this bear market will eventually end, "investors should not assume that the easy times in the market are coming back," says David Bahnsen, chief investment officer at wealth management firm The Bahnsen Group. "We expect enhanced volatility and a focus on cash flow and quality for the foreseeable future."

As such, Bahnsen says it is "very important to pursue high-quality assets," like the best dividend stocks. Other defensive strategies included targeting stocks in the healthcare and consumer staples sectors. Investors that want more diversification in their portfolio hedges have plenty of options among the best bear market ETFs. But for those looking for below-average expenses, consider the safest Vanguard funds to own in a bear market. The names featured by Vanguard offer short-term defense across a variety of strategies and come with the investment advisor's low costs to boot.

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Stock Market Today: Nasdaq Pops as Tesla, Coinbase Stocks Soar

karee.venema@futurenet.com (Karee Venema) — Mon, 09 Jan 2023 21:20:45 +0000

A busy week started with a bang for at least one of the three major market indexes.

While today was quiet on the economic and earnings fronts – both heat up later this week with the December consumer price index (CPI) on Thursday and big banks reporting Q4 results on Friday – there was plenty of single-stock news to mull over. This included an impressive rally for Tesla (TSLA) and a major rebound in one cryptocurrency-related stock.

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Tesla stock soared 5.9% Monday, bringing its three-day gain to 8.5%. Justin Mcqueen, market specialist at Capital.com, points to some buy-the-dip action among investors as the reason for TSLA's recent pop. "December was a torrid month for Tesla, which saw its shares fall by more than 35%, in part due to tax-loss selling activity," Mcqueen says. "But based on Capital.com's recent data, traders are increasingly buying up TSLA again. They have begun to use Tesla's sizable dip to pile back into the shares."

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Another big mover today was Coinbase (COIN), which jumped 15.1% after Jefferies analyst Trevor Williams initiated coverage of the cryptocurrency exchange platform. Williams started COIN at Hold, saying near-term trading volumes will likely be hurt by the "industry-wide fallout from FTX's collapse." Still, the analyst believes "COIN's premium brand, position as an onshore/regulated entity, scale, and healthy balance sheet" will help it weather the storm.

Bed Bath & Beyond (BBBY) also saw a sizable move, climbing 23.7%. BBBY shares took a big tumble last week after the home goods retailer warned it is exploring strategic options – including a potential bankruptcy filing – amid cash flow problems. The company also said it expects to report year-over-year declines in net income and revenue in its fiscal third quarter. BBBY will unveil its full fiscal Q3 results ahead of tomorrow's open.

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As for the major indexes, the tech-heavy Nasdaq Composite rose 0.6% to 10,635. The broader S&P 500, however, fell 0.1% to 3,892 and the blue-chip Dow Jones Industrial Average finished 0.3% lower at 33,517, hurt by weakness in healthcare stocks Johnson & Johnson (JNJ, -2.6%) and Merck (MRK, -3.9%).

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Oil prices were another pocket of strength Monday, with U.S. crude futures climbing 1.2% to $74.63 per barrel – their third straight gain.

"Crude prices are rallying as China’s borders open, refiners get big quotas, and as the dollar slides," says Edward Moya, senior market strategist at currency data provider OANDA. "Chinese hopes for an improving reopening from Covid could help propel oil prices much higher. Oil's downward trend was approaching critical support, so energy traders were eagerly looking for any reason to jump back into the oil trade."

Continued gains in crude oil futures will certainly benefit the best energy stocks. Select energy exchange-traded funds (ETFs) should get a lift too.

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Stock Market Today: Stocks Stumble on Downbeat Data, Recession Fears

dan.burrows@futurenet.com (Dan Burrows) — Tue, 03 Jan 2023 21:08:16 +0000

Stocks kicked off the first trading day of the new year in much the same fashion as they closed out 2022 – with broad-based declines on comparatively light volume.

Some downbeat economic data and a gloomy outlook from the International Monetary Fund weighed on sentiment Tuesday, while steep selloffs in key names likewise did the equity markets no favors.

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It was a light day for economic news, but what the market did get, it sure didn't like. U.S. manufacturing activity continued to contract in December, with operating conditions deteriorating at the fastest pace since the height of the COVID-19 pandemic in May 2020, according to the S&P Global U.S. Manufacturing Purchasing Managers' Index.

"The manufacturing sector posted a weak performance as 2022 was brought to a close, as output and new orders contracted at sharper rates," said Siân Jones, senior economist at S&P Global Market Intelligence. "Demand for goods dwindled as domestic orders and export sales dropped."

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In another blow to market participants' mood, the head of the International Monetary Fund warned that 2023 was ripe for widespread economic pain.

"We expect one-third of the world economy to be in recession," said Kristalina Georgieva, managing Director of the IMF, in an interview with CBS. "Why? Because the three big economies, U.S., E.U., China, are all slowing down simultaneously."

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At the single-stock level, Apple (AAPL, -3.7%) sold off sharply on continued worries about iPhone 14 shipments amid the COVID-19 outbreak sweeping across China. As the largest company by market capitalization, AAPL did damage to all three major indexes.

Meanwhile, shares in Tesla (TSLA, -12.2%) continued to plunge after the electric vehicle company delivered fewer cars during the final three months of 2022 than analysts had forecast. Worries about weakening demand for Tesla vehicles, particularly in China, have contributed to a long period of weakness in the stock.

At the closing bell, the blue-chip Dow Jones Industrial Average was down less than 0.1% at 33,136, while the broader S&P 500 fell 0.4% to finish at 3,824. The tech-heavy Nasdaq Composite declined 0.8% to end at 10,386.

Dividends and Defense for 2023

After the worst year for equities since 2008, plenty of investors are looking to play defense in 2023. Happily, there's no shortage of strategies to reduce volatility, collect regular income and zig when the broader market zags.

The best stocks for a bear market should serve investors well while markets remain in a funk, as should the best ETFs for a bear market. And don't forget that blue-chip dividend stocks – notably the best Dow dividend stocks – have a history of outperforming the broader market when times are tough.

As for the best dividend stocks you can count on, it's tough to beat the S&P 500 Dividend Aristocrats. Not only did these dividend-growth machines beat the broader market handily in 2022, but the magic of compounding ensures that even the Aristocrats with the paltriest of yields can generate gushers of income one day.

Be sure to check out the full list of the 65 best dividend stocks you can count on for 2023.

65 Best Dividend Stocks You Can Count On in 2023

Stock Market Today: Stocks Bounce Back After Latest Jobs Data

karee.venema@futurenet.com (Karee Venema) — Thu, 29 Dec 2022 21:14:46 +0000

With just two sessions left in 2022, bulls finally got the stock market surge they've been hoping for. The major market indexes staged a hearty rally Thursday, helped by a bad-news-is-good-news reading on the labor market in vapor-thin trading volume.

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The proximate cause for Thursday's rally came courtesy of an uptick in weekly jobless claims. The Labor Department reported that initial jobless claims rose by a more-than-expected 9,000 to 225,000 in the week ended Dec. 24. The squeaky tight labor market is a sticking point in the Federal Reserve's efforts to slow the economy and bring down inflation. Any sign that hiring is cooling is considered a step in the right direction for the central bank to ease up on rate hikes.

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Bargain hunters and fund managers looking to add a little window dressing to their year-end returns also helped give equities a lift on Thursday. December is historically one of the strongest months of the year for stocks, but heading into today's trading, the major market indexes were carrying month-to-date losses ranging from 5% to 11%. It was only fitting that some of the day's biggest gainers were stocks that suffered outsized losses this month, including Apple (AAPL, +2.8%), Tesla (TSLA, +8.1%) and Amazon.com (AMZN, +2.9%).

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At the close, the Dow Jones Industrial Average was up 1.1% at 33,220, the S&P 500 Index was 1.8% higher at 3,849, and the Nasdaq Composite had gained 2.6% to 10,478.

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"2022 was an exceptional year and not in a good way," says Brad McMillan, chief investment officer for Commonwealth Financial Network. And what made this year so difficult, he says, were issues that no one foresaw back in January: Sizzling inflation and rising interest rates. McMillan says that among the many lessons this year has taught investors, "perhaps [the] most important is that one year – no matter how good or bad – doesn't achieve or derail your goals."

For investors who've come to realize in 2022 that they prefer a lower-risk, diversified approach, these bear market ETFs or low-volatility ETFs might be a better choice for next year. And for those who've discovered they actually have a higher tolerance for risk? These top small-cap stocks are priced for outsized returns in 2023.

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Stock Market Today: Tesla Keeps S&P 500, Nasdaq in the Red

karee.venema@futurenet.com (Karee Venema) — Tue, 27 Dec 2022 21:16:02 +0000

It was a wobbly start to the final trading week of 2022, with stocks finishing mixed following the long holiday weekend. Investor sentiment got a temporary boost after China said it would open its borders to international travelers next month without requiring them to quarantine.

Still, it wasn't enough to offset a continued slump in Tesla (TSLA) shares and a selloff in air carrier stocks.

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The news from China was a positive catalyst for a number of U.S.-listed Chinese shares. Among those that caught a lift were e-commerce stocks Alibaba Group (BABA, +4.9%) and Pinduoduo (PDD, +1.4%).

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However, while those stocks closed higher on China's push to end its restrictive COVID measures that have slowed economic growth, Tesla slumped 11.4% on news the electric vehicle maker suspended production at its Shanghai production facility earlier than anticipated, according to a Reuters report. The company previously said it would halt activity at the facility for eight days beginning Dec. 25, but ended production a day early, with some pointing to spiking COVID cases among its factory workers. TSLA stock is now down 44% so far this month.

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Adding to the market's headwinds was a selloff in several U.S. transportation stocks after a deadly nationwide winter storm sparked thousands of flight cancellations. Southwest Airlines (LUV) canceled roughly 70% of its flights on Monday and another 63% of flights on Tuesday, sending its shares tumbling 6.0%. Fellow air carriers Delta Air Lines (DAL, -0.8%) and American Airlines Group (AAL, -1.4%) also closed lower.

As for the major market indexes, the S&P 500 Index fell 0.4% to 3,829 and the Nasdaq Composite gave back 1.4% to 10,353. The Dow Jones Industrial Average, however, managed to gain 0.1% to 33,241 on strength in Verizon Communications (VZ, +2.2%).

Top Investing Ideas for 2023

As we have mentioned in this space before, the stock market is on track to close out its worst year since 2008. And while that fact alone can weigh on investor sentiment heading into the new year, there are a number of historical data points that should give investors hope as we enter 2023.

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For one, there is "the spotless track record for the S&P 500 in the year following midterm elections (average return ~13%)," says Michael Reinking, senior market strategist at the New York Stock Exchange. Additionally, in the 18 times the S&P 500 has ended the year down more than 1% since 1946, it has been higher the next year 78% of the time, averaging a nearly 15% annual gain, Reinking says.

So, despite the numerous challenges investors face in the new year, including uncertainty over inflation, interest rates and a possible recession, there are solid portfolio choices they can make to help maneuver these hurdles. These include picking the best dividend stocks or analysts' highest-conviction small-cap stocks – the latter of which are priced for outstanding returns in the new year. There's also our list of the best stocks to buy for 2023, which include high-quality companies that are well positioned to traverse the ongoing market disruptors we expect to see in the new year.

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Stock Market Today: S&P 500 Extends Losing Streak

karee.venema@futurenet.com (Karee Venema) — Wed, 07 Dec 2022 21:15:23 +0000

Stocks bounced back and forth between positive and negative territory for most of Wednesday before ending the day with yet another loss.

With little in the way of economic data to react to, investors continued to fret over the Federal Reserve's next steps as far as interest rates go. Also worrying Wall Street were recent comments from some of the country's top bank CEOs, which served to amplify fears of a possible recession in 2023. One of the more notable remarks came from Wells Fargo CEO Charlie Scharf. "There is a slowdown happening, there's no question about that," Scharf said at a financial conference Tuesday, adding that he expects "a fairly weak economy throughout the entire year."

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"It would appear the recovery in stocks – bear-market rally, or otherwise – has run out of steam, and investors are left wondering whether what follows next is another test of the lows or simply a correction of that impressive two-month surge," says Craig Erlam, senior market analyst at currency data provider OANDA. "The difficulty investors have now is balancing the coming end of the tightening cycle with a potential global recession next year amid heavily discounted valuations."

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While the broader market chopped around on Wednesday, several individual stocks made decisive moves. Carvana (CVNA), for one, plummeted 42.9% as bankruptcy buzz swirled around the one-time pandemic darling. Tesla (TSLA) was another noteworthy decliner, with the electric vehicle maker falling 3.2% amid concerns over weakening demand in both the U.S. and China.

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As for the major indexes, the broader S&P 500 Index notched its fifth straight loss, giving back 0.2% to 3,933. The tech-heavy Nasdaq Composite fell 0.5% to 10,958, while the blue-chip Dow Jones Industrial Average eked out a 1.6-point gain to end at 33,597.

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On a brighter note, several companies announced shareholder-friendly initiatives today. These included farm equipment maker Deere (DE, +0.6%), which lifted its annual dividend by 6%, and air carrier Southwest Airlines (LUV, -4.7%), which reinstated its dividend payment after suspending it early on in the pandemic.

Additionally, Lowe's (LOW, +2.4%) unveiled a new $15 billion share buyback program, which will be added to the previous program's balance of $6.4 billion as of Dec. 6. The home improvement retailer is also a member of the S&P 500 Dividend Aristocrats – or S&P 500 companies that have raised their payouts for at least 25 consecutive years. In May, LOW hiked its dividend by 31%, marking its 48th straight annual increase. We regularly refresh our running list of Dividend Aristocrats, so if you are looking for the best dividend stocks on Wall Street, you'll definitely want to check it out.

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Tesla Stock Slumps on Demand Concerns

dan.burrows@futurenet.com (Dan Burrows) — Wed, 07 Dec 2022 18:10:41 +0000

Tesla (TSLA) stock sold off once again on Wednesday, this time over concerns about weaker demand for its electric vehicles not only in the critically important market of China but also in the U.S.

The latest warning comes courtesy of Bernstein analyst Toni Sacconaghi and follows reports earlier this week that Tesla is cutting production of its Model Y midsize SUV at its Shanghai factory by 20% in December.

Tesla denied the reports, but Sacconaghi – and to some extent, the market – sees trouble ahead.

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"Tesla increasingly appears to have a demand problem," writes Sacconaghi, who rates Tesla stock at Underperform (the equivalent of Sell). "The company has responded by cutting prices in China and the U.S. (for December deliveries), and purportedly reducing production in China."

The analyst attributes Tesla's demand problems to a number of issues, including increasing competition from other manufacturers of electric vehicles, a weakening global economy, and "Tesla's narrow (and expensive) product family, which is reaching saturation."

Sacconaghi estimates that price cuts in the U.S. and China will cause Tesla's average selling price to fall by roughly 2.6% or $1,400 per car. That, in turn, will depress the gross margin in Tesla's auto business by an estimated 200 basis points, or 0.2%.

More importantly, the analyst says that Tesla might have to reduce prices repeatedly in the not-too-distant future.

"Given weakness in China, we believe that Tesla will need to make the October 24 price cuts permanent and make further incremental price cuts in order to stimulate demand," Sacconaghi adds.

Tesla stock has lost half its value in 2022, but Wall Street leans collectively toward bullishness on the name. Of the 35 analysts covering TSLA stock tracked by S&P Global Market Intelligence, 13 call it a Strong Buy, eight rate it at Buy, 11 have it at Hold and three call it a Sell.

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Their average target price of $279.83 gives Tesla stock an implied upside of about 62% in the next 12 months or so.

As for Tesla's valuation, some market observers – notably Scott Galloway, clinical professor of marketing at the New York University Stern School of Business – argue that TSLA stock is almost uniquely overpriced.

Basic metrics, however, are more forgiving. For example, Tesla stock trades at 31.4 times analysts' 2023 earnings per share (EPS) estimate, per S&P Global Market Intelligence. That's by no means cheap – but one could argue that it's not an unreasonable premium to pay for a company that's forecast to generate average annual EPS growth of almost 29% over the next three to five years.

Tesla CEO Elon Musk's controversial takeover of Twitter also factors into Tesla stock's valuation. On a fundamental level, Musk's sale of some of his Tesla stock in order to help fund his purchase of the social media site added to downward price pressure on TSLA. Musk's antics and controversial statements as Twitter's owner also have at least indirect effects on both Tesla stock and public perceptions of the brand.

Such factors don't fit neatly into analysts' spreadsheets, but they are indeed real. CFRA Research analyst Garrett Nelson, for one, acknowledges the distractions caused by Tesla's mercurial CEO.

"TSLA's share price performance has been hurt by the incessant noise surrounding Twitter since Elon Musk completed his acquisition in late October, but we believe concerns regarding additional stock sales by Musk are overblown," writes Nelson, who rates Tesla stock at Strong Buy.

The analyst adds that he's bullish on demand for the forthcoming Tesla Semi, a fully electric semi-truck, and forecasts EPS growth of 40% in 2023.

"We also see an increased likelihood of a stock buyback announcement in the range of $5 billion to $10 billion following TSLA's selloff," Nelson says.

Stock Market Today: Stocks Spiral After Strong Data Sparks Fed Fears

karee.venema@futurenet.com (Karee Venema) — Mon, 05 Dec 2022 21:15:50 +0000

Stocks started the week deep in the red as the November jobs report continued to weigh on investor sentiment. This morning's data, which showed services sector activity and factory output were both stronger than economists expected, provided additional signs that the U.S. economy remains resilient despite the Federal Reserve's best attempts to slow things down.

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Specifically, the Institute for Supply Management's non-manufacturing index – which measures activity in the services sector – rose to 56.5 in November from October's reading of 54.4. This was well above the consensus estimate for a decline to 53.7. A separate report from the Commerce Department showed factory orders were up 1% from September to October, more than the 0.7% increase economists were expecting.

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"Good economic news is bad news for stocks, as it will keep the risk elevated that rates might have to end up higher later next year," says Edward Moya, senior market strategist at currency data provider OANDA. "The risks that the Fed might need to do more remain elevated and that is why this economy needs to head to a recession. This next recession, however, won't be rescued by quick Fed easing or a fiscal response, as that will fuel inflation risks."

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Today's selling was widespread, with all 11 sectors closing in the red. Energy (-3.0%) was the biggest decliner, with consumer discretionary (-2.9%) a close second on weakness in Tesla (TSLA). The electric vehicle maker plunged 6.4% after reports from Bloomberg and Reuters suggested it is planning on lowering December production at its Shanghai, China, plant by 20% from its November output. Tesla denied the media reports.

As for the major indexes, the Nasdaq Composite slumped 1.9% to 11,239, the S&P 500 Index fell 1.8% to 3,998, and the Dow Jones Industrial Average shed 1.4% to 33,947.

Use High-Yield ETFs for Defense

Investors might want to brace for some choppy trading through the Federal Reserve's upcoming policy decision and the latest consumer price index (CPI) reading – both slated for next Wednesday. "After [Fed Chair Jerome] Powell's speech last week, I would have expected the market to perform well heading into the next Fed decision. Then job market data offset such traction," says Guido Petrelli, founder and CEO of market insight firm Merlin Investor. "The market now seems to take a conservative position while waiting for more clarifications from the Fed meeting."

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Petrelli says it's likely the Fed will raise rates by 0.50%, as expected, but that "a crucial indication" will come in the Powell presser that will follow the policy announcement. "That's why I wouldn't expect any significant positive move from the market this week, with some reasonable drop coming from playing defense."

Investors playing defense over the long term have plenty of options at their disposal. In addition to healthcare and consumer staples stocks – which tend to do well in recessionary environments – investors can also seek out safety in dividend-paying names. While there's no shortage of dividend-paying stocks on Wall Street, you can also take a more diversified approach with high-yield ETFs. The nine names featured here cover both conservative and aggressive strategies but they all have one thing in common: healthy yields that are well above the broader market.

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Stock Market Today: Stocks End Choppy Session With a Loss

karee.venema@futurenet.com (Karee Venema) — Thu, 20 Oct 2022 20:18:27 +0000

The stock market kept investors on edge Thursday as markets bounced between positive and negative territory throughout the day.

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Stocks initially opened lower as investors heard news that Liz Truss resigned as the United Kingdom's prime minister after a short and tumultuous tenure. However, the markets quickly turned higher amid well-received earnings reports from telecom AT&T (T, +7.7%) and tech giant International Business Machines (IBM, +4.7%).

Not all stocks rose after earnings, though, with Tesla (TSLA) slumping 6.7% after the electric car maker said it will likely miss its 2022 deliveries target, blaming "an increase in the cars in transit at the end of the year."

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But the market's midday momentum couldn't be maintained, with stocks reversing course again around lunchtime. The Dow Jones Industrial Average ended the day down 0.3% at 30,333, while the S&P 500 Index (-0.8% at 3,665) and the Nasdaq Composite (-0.6% at 10,614) also chalked up modest losses.

"Quickly looking ahead to tomorrow, it is options expiration so be on the lookout for some additional volume and volatility around the open and the close," says Michael Reinking, senior market strategist at the New York Stock Exchange. "Earnings will once again be in focus. There is no economic data in the U.S., but overnight we get Japan inflation, U.K. retail sales and European Union (EU) consumer confidence." Included in those earnings reports are social media firm Snap (SNAP), which reports tonight, and credit card company American Express (AXP), which will unveil its results ahead of tomorrow's open.

Are Stocks Cheap Enough to Buy?

Are stocks cheap enough to start buying? That's a question many investors may be asking themselves following the S&P 500's nearly 20% decline over the past 12 months.

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Answering that question is not an easy task. On one hand, the forward price-to-earnings (P/E) ratio for the S&P 500 is at its lowest point since the March 2020 crash, and technical indicators are pointing to more short-term upside for stocks. But on the other, signs are suggesting the volatility seen throughout 2022 will continue and the stock market has yet to hit a bottom.

"We anticipate that financial markets are likely to continue to trade day-to-day in reaction to economic reports and/or comments by Fed officials," says Scott Wren, senior global market strategist Wells Fargo Investment Institute. "We advise to exercise patience in the near term, and expect potential better opportunities in the broader equity market next year." Read on as we explore what this all means for investors looking for bargains in today's market.

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Stock Market Today: Stock Rally Continues; Twitter Soars on Musk U-Turn

karee.venema@futurenet.com (Karee Venema) — Tue, 04 Oct 2022 20:32:10 +0000

Stocks ran higher for a second straight day, building on Monday's gains which saw the three major indexes each rally more than 2%.

There were two different catalysts behind Tuesday's surge. Both raised hopes that the streak of aggressive Fed rate hikes could end sooner rather than later. One came from the Reserve Bank of Australia, which overnight issued a lower-than-expected rate hike. The other was this morning's Job Openings and Labor Turnover Survey (JOLTS) that showed job openings in the U.S. declined by 10% in August while layoffs edged higher.

Tesla Deliveries Miss Estimates. Is the EV Market at Risk?

"A hot labor market continues to be a challenge to the Fed's goal," says Matt Dyer, investment analyst at institutional asset management firm Penn Mutual Asset Management. But while "this morning's JOLTS data release shows some signs of cooling, the labor market is still running extremely hot with job openings outweighing the number of job seekers," Dyer adds.

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The day's headlines weren't all about global central banks and economic data, though. In single-stock news, Twitter (TWTR, +22.2%) rallied after Bloomberg reported that Tesla (TSLA, +2.9%) CEO Elon Musk will reverse course and go through with his original $44 billion bid to buy the social media company. The two parties were scheduled to go to court later this month after Musk in August accused Twitter of fraud and said he wanted to walk away from the deal.

"It's the latest twist in the dramatic takeover saga, and comes just two days before he was set to be deposed by Twitter's lawyers, raising speculation that 'Team Musk' believe the chances of the court ruling in his favor were slim," says Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. "If Elon Musk loses, it could mean he'd be forced to complete the deal or be made to pay billions or more for breach of contract."

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At the close, the Dow Jones Industrial Average was up 2.8% at 30,316. The S&P 500 Index (+3.1% at 3,790) and the Nasdaq Composite (+3.3% at 11,176) also finished with solid gains.

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 rocketed 3.9% to 1,775.
U.S. crude futures jumped 3.5% to finish at $86.52 per barrel ahead of tomorrow's highly anticipated OPEC+ meeting.
Gold futures gained 1.7% to end at $1,730.50 per ounce.
Bitcoin rose 3.4% to $20,220.13. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Poshmark (POSH) popped 13.1% after the online second-hand apparel marketplace said it will be acquired by South Korean internet firm Naver for $1.2 billion, or $17.90 per POSH share. Today, the stock closed just below here at $17.61. "E-commerce has been one of the toughest sub-groups in our coverage over the past 12-18 months, with the average of our six e-commerce names trading ~80% below their 52-week highs," says Wedbush analyst Tom Nikic (Neutral). "This deal, however, may have created a 'floor' for this beaten-down group. Admittedly, POSH does have some key advantages that make them relatively more attractive to potential acquirers (healthy cash balance, asset-light business model, large user base, 'social network' characteristics, etc.), but some of the other e-commerce names in our coverage look particularly cheap in light of the proposed takeout."
Rivian Automotive (RIVN) soared 13.9% after the electric vehicle (EV) maker said production in the third quarter was up 67% from Q2. The company also confirmed that it is on pace to reach its 2022 goal of building 25,000 vehicles.

Midterm Elections and Stocks

Another potentially positive driver for the stock market is right around the corner: the midterms. Congressional midterm elections will occur on Tuesday, Nov. 8, and determine which political party controls the House of Representatives and the Senate for the next two years.

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A lot can happen between now and the midterm election races, but odds seem increasingly likely for a split Congress – which tends to be the most bullish outcome for the stock market. "Historically, split governments have been the best for equities," says Savita Subramanian, head of equity and quantitative strategy at BofA Securities. "Q4 has seasonally been the strongest quarter (+4.5% on average and positive 81% of the time), particularly in midterm years (+7.7% on average and 86% positive hit rate)."

But returns aren't the only impact elections can have on the stock market. Here, we explore what else the midterms could mean for investors.

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Tesla Deliveries Miss Estimates. Is the EV Market at Risk?

kiplinger@futurenet.com (Will Ashworth) — Tue, 04 Oct 2022 15:10:43 +0000

Tesla (TSLA, $242.40) reported its third-quarter production and delivery numbers this past Sunday. Investors were disappointed by the figures, and TSLA stock lost more than 8% in Monday trading.

How bad were they?

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They weren't all that bad. In fact, they were record-setting, with total production of 365,923, up 54% over Q3 2021. And Tesla delivered 343,830 vehicles over the three-month period, a 42% increase from a year ago. Deliveries of the Model S and X – its two older models – more than doubled on a year-over-year (YoY) basis to 18,672. The newer Model 3 and Y had collective deliveries of 325,158.

That last figure appears to be the fly-in-the-ointment for investors. Although the Model 3 and Model Y deliveries increased 40% YoY, they jumped 87% in Q3 2021. That suggests these two electric vehicle (EV) models are experiencing decelerating sales.

What Tesla's Q3 Numbers Mean for EV Sales

Investors could be wondering what Tesla's latest production and delivery numbers mean for the entire EV market.

Analysts expected Tesla to deliver between 14,000 and 15,000 more EVs than it did in the third quarter. That's a 4.2% miss on the consensus estimate.

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However, the fact Tesla didn't deliver all the vehicles it produced in the quarter – a 22,093 shortfall – suggests sales in China were softer than expected, forcing the company to send some of the EVs produced at its Shanghai factory to Europe and the U.S.

Investors who were expecting Chinese sales to be stronger are now left wondering if Tesla's miss will be a familiar tune across all EV stocks? Or is this merely a blip in Elon Musk's quest to sell more electric cars than anyone else.

Tesla is Confident About a Q4 Rebound

TSLA's delivery-to-production shortfall is likely a one-time affair rather than the start of an ugly trend. The company expects its fourth-quarter production to jump dramatically and continue into next year amid solid increases in output at its two newer assembly lines in Texas and Germany.

Tesla still feels it can grow deliveries by 50% in 2022 despite lingering supply-chain issues. Through the first nine months, it produced 929,910 electric vehicles. Its internal projection for fourth-quarter production of its two newer products is 495,000, or approximately 95% overall. It believes that it can produce 40,000 EVs per week by the end of 2022.

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If it does meet this fourth-quarter goal, it will produce more than 1.4 million EVs worldwide in 2022. Its internal projections also put it on course to produce 2.1 million EVs in 2023.

CFRA Research analyst Garrett Nelson discussed Tesla's latest production numbers in an Oct. 3 note to clients. He has Strong Buy rating and a $400 price target on TSLA stock.

"While shares could trade lower on Monday, we continue to view TSLA as one of the market's most compelling earnings growth stories,” Nelson stated in his note.

UBS analysts believe that the Tesla is best positioned to be able to lower prices in 2023 to ensure its increased production capacity is fully utilized. And it can do this while maintaining its healthy 30% auto gross margins.

If there's an industry slowdown, Tesla didn't get the memo. It appears to be in excellent shape heading into the final quarter of 2022 and beyond.

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Stock Market Today: Dow Spikes 765 Points to Start Q4

karee.venema@futurenet.com (Karee Venema) — Mon, 03 Oct 2022 20:32:42 +0000

Stocks kicked off October with a bang, as a "bad news is good news" economic report sent Treasury yields retreating and prompted investors to take a bite of risk.

Specifically, the Institute for Supply Management's purchasing managers' index fell to 50.9 in September from the August reading of 52.8. This is the lowest level since May 2020.

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"The U.S. manufacturing sector continues to expand, but at the lowest rate since the pandemic recovery began," says Timothy Fiore, chair of the ISM manufacturing business survey committee. "Following four straight months of panelists' companies reporting softening new orders rates, the September index reading reflects companies adjusting to potential future lower demand."

Dan Wantrobski, technical strategist and associate director of research at Janney, explains more about why this sign of economic weakness sent stocks higher. "Global manufacturing data came in weaker than expected this morning, fueling investor optimism of a Fed 'pivot' in policy ahead [i.e., it will stop raising interest rates]," Wantrobski says. "The result so far is notable pullbacks in both the U.S. dollar index and Treasury yields and a broad-based rally in equities."

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Indeed, the 10-year Treasury yield tumbled 15.3 basis points to 3.651% today (a basis point equals 0.01%). As for the stock market, the Dow Jones Industrial Average jumped 2.7% to 29,490, the S&P 500 Index gained 2.6% to 3,678, and the Nasdaq Composite rose 2.3% to 10,815.

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 jumped 2.7% to 1,708.
Gold futures climbed 1.8% to finish at $1,702 an ounce.
Bitcoin edged up 0.5% to $19,551.81. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Tesla (TSLA) slumped 8.6% after the company said it delivered 343,000 vehicles in the third quarter. This was an all-time high for the electric car maker, but fell short of the 371,000 deliveries analysts were expecting. "TSLA also held its AI Day late Friday, unveiling a prototype of its Optimus robot that it said would be available for purchase in 3-5 years and we think fell short of the typical hype leading up to Tesla investor events," says CFRA Research analyst Garrett Nelson (Strong Buy). Its capabilities appeared to be on par with existing robotics technologies – in other words, nothing groundbreaking. The good thing is we think investors are currently ascribing little value to future robot sales." While shares traded lower today, Nelson continues to view "TSLA as one of the market's most compelling earnings growth stories."
Credit Suisse (CS) was down 5.6% at its intraday low after a report in the Financial Times sparked concerns over the financial strength of the Swiss bank. "CS has been in the news recently due to the uncertainty and speculation surrounding its strategic review, which is scheduled to be concluded by end of October," says CFRA Research analyst Firdaus Ibrahim (Sell). "The many options rumored to be considered by CS, including exit of U.S. investment banking, creation of a 'bad bank' to hold risky assets, and capital raise, indicate a huge overhaul is needed to turn around the bank, in our view. We believe that the negative sentiment surrounding the stock will not abate any time soon and believe its share price will continue to be under pressure. A convincing restructuring plan will help, but we remain skeptical, given its poor track record of delivering on past restructuring plans." CS stock finished the day up 2.2%.

Energy Stocks Rise Ahead of OPEC+ Meeting

The energy sector (+5.7%) was the best-performing sector today as U.S. crude futures climbed 5.2% to $83.63 per barrel. The rally comes ahead of Wednesday's meeting between the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.

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"An in-person OPEC+ meeting means get your popcorn ready and prepare for some fireworks," says Edward Moya, senior market strategist at currency data provider OANDA. "Energy traders are pumping up crude prices ahead of the OPEC+ meeting as expectations are high that they will deliver the biggest reduction in output since the beginning of the pandemic. This will be the first in-person meeting since 2020, which means they will probably go big here and deliver a cut of more than 1 million barrels per day."

If that's the case, energy stocks could see more upside this week – and these are some of the top picks in the sector. Many have pulled back from recent highs, but each is still well-liked by the analyst crowd.

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Stock Market Today: Stocks Bounce as Oil Prices Crumble

karee.venema@futurenet.com (Karee Venema) — Wed, 07 Sep 2022 20:28:32 +0000

Stocks closed higher Wednesday as bargain hunters swooped in following a lengthy stretch of losses for the major indexes.

Today's positive price action came as the 10-year Treasury yield eased back from yesterday's two-month high, finishing down 6.7 basis points at 3.273%. A basis point is one-one hundredth of a percentage point.

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And the buying persisted even after Federal Reserve Vice Chair Lael Brainard said in an early afternoon speech that the central bank is "in this for as long as it takes to get inflation down." The Fed will meet later this month, with the market largely pricing in the probability of a third straight 75 basis-point rate hike.

Nearly all sectors finished higher, with utilities (+3.1%) and consumer discretionary stocks (+3.1%) leading the charge. The one outlier was energy, which slumped 1.2% as U.S. crude futures tumbled 5.7% to $81.94 per barrel – their lowest close since Jan. 11, according to Dow Jones Market Data – amid expectations of slowing global economic growth. "Oil's breakdown today is a bigger shot across the bow, pointing to further struggles ahead in our opinion," says Dan Wantrobski, technical strategist and associate director of research at Janney Montgomery Scott. "We believe the commodity can break below $80 from here, targeting the mid-$70s range in the weeks ahead."

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As for the major indexes, the Nasdaq Composite jumped 2.1% to 11,791 – snapping its seven-day losing streak, its longest one since 2016. The S&P 500 Index (+1.8% at 3,979) and the Dow Jones Industrial Average (+1.4% at 31,581) also notched impressive gains.

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 spiked 2.2% to 1,832.
Gold futures gained 0.7% to finish at $1,727.80 an ounce.
Bitcoin rose as high as $19,183, before backtracking to $19,011.19, up 1% from this time yesterday. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Twitter (TWTR) rose 6.6% after a report in The Wall Street Journal said a Delaware judge ruled that Elon Musk is allowed to include whistleblower allegations against the social media company in his countersuit. However, the judge denied Musk's request to push the trial back to November from its currently scheduled date of Oct. 17. Twitter is suing Musk over his attempt to walk away from a $44 billion deal to buy the company, while the Tesla (TSLA) CEO in a countersuit has accused TWTR of misrepresenting key metrics for its business. "Although we believe the whistleblower comments do provide Musk some hope in the upcoming trial while adding a slightly greater deal of uncertainty, we think it will ultimately be moot and continue to see a high probability that TWTR will be victorious in the courts," says CFRA Research analyst Angelo Zino (Hold). "We still think the most likely outcome is a purchase of TWTR by Musk, either forced by the courts or a settlement at less than a 15%-20% discount."
Coupa Software (COUP) jumped 17.9% after the company, who offers cloud-based business spend management software, reported earnings. In its second quarter, COUP saw quarterly subscription revenues spike 23% year-over-year to a record $193 million, which helped boost total revenue 18% to $211 million. The firm also said its board of directors approved a $100 million stock buyback program. UBS Global Research analyst Taylor MicGinnis called the results "solid," but kept a Neutral (Hold) rating on the stock, citing a "more reasonable" valuation at current levels given "limited visibility beyond high-teens growth near term."

Stay Focused on the Bigger Picture

Uncertainty over the magnitude of the Federal Reserve's next rate hike will continue to move markets until the central bank's next policy meeting, scheduled for Sept. 20-21. That makes tomorrow morning's speech from Fed Chair Jerome Powell a key event to watch, and one that could potentially spark more volatility for stocks.

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But sage investors know these short-term ups and downs are merely noise when compared to the bigger picture. "In the end, the day-to-day machinations of the market only matter to the extent we allow them to," says Ross Mayfield, investment strategy analyst at Baird. "Volatility and sell-offs – in all of their various shapes and sizes – are just a reality to bear for the long-term stock owner."

Indeed, investors can take advantage of the down days to gradually boost their core portfolio holdings. Not sure where to start? How about with these sturdy blue-chip stocks or by checking out some of Wall Street's best dividend payers. For investors wanting a broader approach, may we suggest the Kip 25. This list of Kiplinger's favorite low-cost mutual funds boast solid long-term performance records and managers with tenures to match. Check them out.

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Biden's Inflation Reduction Act: Investing Winners and Losers

Charles Lewis Sizemore, CFA — Mon, 08 Aug 2022 17:07:02 +0000

The Inflation Reduction Act is now a reality. President Joe Biden signed the legislation into law on Tuesday, Aug. 16, after it was passed in both the Senate and the House of Representatives.

It remains to be seen whether the Inflation Reduction Act actually reduces inflation. It is, after all, first and foremost a spending bill, and new government spending tends to be inflationary. Ultimately, Federal Reserve policy, the untangling of the global supply chain, and increased energy production to offset the effects of Russian sanctions will have far more impact on inflation.

All the same, this is one of the most significant pieces of legislation in years, and it has major implications for American environmental policy and prescription drug prices.

The Inflation Reduction Act and Taxes: What You Should Know

We'll start with the two biggest talking points: green investment and Medicare pricing. The bill would plow $369 billion into renewable energy investment, including wind and solar projects, with a goal of reducing carbon emissions by 40% by 2030. It would also expand tax credits for electric vehicle (EV) purchases and promote U.S. energy independence.

The other big news is that Medicare would be able to negotiate drug prices for the first time, potentially lowering prescription costs for both patients and taxpayers.

Of course, nothing is free. To pay for all of this, the bill would levy a 1% tax on all corporate share buybacks and a 15% minimum corporate income tax on any company with more than $1 billion in revenues.

"We find the potential tax on share buybacks to be particularly interesting," says Sonia Joao, chief operating officer of Houston-based RIA Robertson Wealth Management. "Share buybacks have been a popular way for American companies, and particularly tech firms, to reward their shareholders. This may incentivize them to spend less on payouts and more on dividends or debt reduction. It's early, but we could see this having far-ranging implications for the U.S. market."

Stock buybacks have added trillions of dollars in buying pressure over the past decade. In fact, the companies of the S&P 500 bought back approximately $1 trillion in just the past four quarters alone, according to Yardeni Research. So, clearly, any significant change in buying patterns will potentially have an outsized impact on the market. It could mean higher dividends, but lower capital appreciation.

Today, we're going to look at some of the potential winners and losers of the Inflation Reduction Act.

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Data is as of Aug. 5.

Industry: Auto manufacturers
Market value: $903.0 billion

One of the most obvious winners of the Inflation Reduction Act is electric vehicle leader Tesla (TSLA, $864.51).

Tesla was an early beneficiary of federal taxpayer subsidies for EV purchases. But unfortunately, the company also became a victim of its own success. By 2018, Tesla had already sold more than 200,000 electric vehicles, which meant that they had exhausted their government allowance… and that buyers were no longer entitled to the $7,500 credit. This put Tesla at a major disadvantage to younger startups or to traditional automakers that had only recently dipped their toes into the EV market, as its products were effectively $7,500 more expensive.

The Inflation Reduction Act lifts the cap, thus making Tesla EVs eligible for the subsidy again.

Subsidies, or the lack thereof, wasn't Tesla's only issue, of course. The company faces an onslaught of new competition in both electric vehicles and in autonomous driving, two areas where Tesla had a major head start. Tesla also has both the blessing and the curse of being run by eccentric billionaire Elon Musk. Musk remains a visionary in the EV space, but his media antics – such as his attempted purchase of social media platform Twitter (TWTR) – have proven to be a distraction.

Still, the return of the subsidy is a big deal, as is the broader focus on clean, renewable energy. This may have been just the shot in the arm that Tesla's shares needed.

One caveat: The rebate only applies to cars priced under $55,000. So, Tesla might need to sell a cheaper model or a slimmed down version of its Model 3 if it is to take full advantage.

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Industry: Specialty chemicals
Market value: $27.9 billion

A major investment in renewable energy and in electric vehicles can only mean one thing: a massive increase in demand for energy storage. EVs depend on large battery packs, and storage is a critical part of making solar and wind energy viable replacements for fossil fuels. After all, the sun doesn't shine at night, and the wind doesn't blow all the time.

Demand for battery storage means demand for lithium, and that's good news for major lithium producers like Albemarle (ALB, $237.99).

Founded in 1887, Albemarle is a leading global producer of lithium and bromine. Without the raw materials that ALB produces, there could be no Tesla or any other electric vehicle. But beyond that, there could be no iPhone or battery-powered laptop computer either. Virtually every wireless electronic gadget you own depends on a lithium ion battery. And those batteries depend on the mining and production of high-quality lithium.

Albemarle isn't a glitzy tech stock. It's a gritty materials stock. But it's the gritty materials stock that makes glitzy tech possible.

Demand for lithium was already strong long before the Inflation Reduction Act was dreamed up, and demand would continue to be strong even if the bill somehow died in the House of Representatives. But the potential increase in demand due to the bill's climate provisions will only turbocharge ALB even higher.

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Industry: Oil & gas midstream
Market value: $33.4 billion

The Inflation Reduction Act is known mostly for its emphasis on renewable energy. After all, it pledged to reduce greenhouse gasses 40% by 2030. But given that West Virginia Senator Joe Manchin's vote was critical to the bill's passage – and given the importance of traditional fossil fuels to the Mountain State – there were a few sweeteners for energy and energy infrastructure companies.

At the heart of it is a revision of the permitting process for infrastructure, including pipelines, that would force the government to make a decision on whether or not to issue a permit within two years.

Major pipeline projects, including the Dakota Access and the Keystone pipelines, have been political hot potatoes over the past decade. Eliminating some of the uncertainty surrounding new projects – and forcing the government to give a straight answer in a reasonable timeline – is a major plus for pipeline operators and particularly serial growers like Energy Transfer (ET, $10.82).

ET operates over 120,000 miles of pipeline assets, and approximately 30% of all American natural gas flows through Energy Transfer assets.

Natural gas is considered a "bridge" energy source by many, or an interim step in transitioning away from dirty coal into clean renewable energy. But it's a bridge that we may be crossing for decades, and in the meantime, there is money to be made. At current prices, Energy Transfer yields over 8%.

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Industry: Utilities – regulated electric
Market value: $172.9 billion

The stated aim of the bill, apart from lowering inflation, is to make the U.S. energy grid greener. As such, $113 billion is earmarked to encourage the building of new renewable electricity plants. That should be boon to NextEra Energy (NEE, $87.98) and other utility operators with a major presence in renewable energy. NEE has ambitious plans in place to eliminate its carbon emissions entirely. Already, the company is the world's largest producer of wind and solar energy.

But the benefits to utilities go beyond the incentives to build more capacity. If the bill is successful in advancing the transition to electric vehicles, then demand for electricity will naturally rise as drivers substitute a trip to the gas station with an overnight charge in their garage.

And the same holds true for appliances, hot water heaters and home heating systems. While we will still be using natural gas in existing construction for decades, new construction will depend far more heavily on electricity.

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Industry: Consumer electronics
Market value: $2.66 trillion

Whether or not Apple (AAPL, $165.35) is a winner or loser here will depend on how the company reacts to the tax on stock buybacks. Apple spent over $85 billion on repurchases last year, and in the past decade, that number is close to half a trillion. And this was before the company announced a new $90 billion buyback plan back in April.

Half a trillion dollars is a lot of money, even for a company as large as Apple. And while those buybacks are testament to the company's massive success and almost unbelievable ability to generate mountains of free cash flow, let's face it: This amount of buying pressure from Apple's treasury has clearly had an impact on the share price. This isn't a testable hypothesis, and we have no way to know what AAPL's value would be today in the absence of those repurchases. But it's not a stretch to say that its share price is significantly higher today than it would have been without all of that additional buying.

So, anything that curtails buybacks going forward would be a potential risk for Apple shareholders.

Now, Apple has options here. They can choose to plow some of that buyback money into higher dividends or even into a one-time special dividend. Or, they could further strengthen their already fortress-strong balance sheet by paying down debt.

And it's entirely possible that Apple just continues with its buyback plans and considers the tax a cost of doing business. The 1% levy really isn't going to make or break the company.

So, while Apple is a potential investing loser of the Inflation Reduction Act… it's not likely to lose all that much, and neither are its fellow buy-back hoovering tech competitors, such as Meta Platforms (META) and Alphabet (GOOGL).

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Industry: Drug manufacturers – general
Market value: $449.9 billion

Big Pharma will have to negotiate with Medicare going forward. And since Medicare pricing tends to drive the pricing by private insurance companies as well, the impact on drug costs should be significant. This should be a major win for patients and taxpayers alike.

That said, we have to temper expectations here. The law phases in negotiation in stages, with only 10 drugs subject to negotiation in 2026. And newer drugs would not be eligible for negotiation until at least nine years after their release.

Further complicating this is the fact that we still don't know which drugs will make the first cut.

Still, a precedent is being set. And future acts of Congress will likely accelerate what the Inflation Reduction Act has started.

None of this is particularly good for Big Pharma giants like Johnson & Johnson (JNJ, $171.11). Given the phased nature of the negotiation, there will be no immediate impact on JNJ's profitability. But it's coming, so investors should be prepared.

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Industry: Internet retail
Market value: $1.43 trillion

Amazon.com (AMZN, $140.80) is a wonder of modern capitalism. Amazon essentially created the e-commerce economy from scratch and then followed that up by creating the cloud computing economy from scratch. It's fair to say that AMZN is the most influential company of the past 30 years, and it has done more to revolutionize the way we live than any other company of our lifetimes.

AMZN also happens to be a pioneer in legal tax avoidance. Despite generating $35.1 billion in U.S. profits in 2021, the company enjoyed a federal income tax rate of just 6.1%, according to the Institute on Taxation and Economic Policy.

Now, to be clear, Amazon did nothing "wrong" by avoiding taxes. We all do everything in our power to lower our tax bills, and AMZN simply took advantage of the opportunities presented. It would be doing a disservice to its investors to not take advantage.

Well, that landscape is now changing. Under the Inflation Reduction Act, companies with at least $1 billion in profits would be required to pay a minimum tax rate of 15% on their reported profits.

Amazon will continue to mint money. But going forward, it's going to have to share a bigger chunk of it with Uncle Sam, which means less for those invested in AMZN stock.

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How Senate Breakthrough on Climate Could Benefit ESG Investors

ellen.kennedy@futurenet.com (Ellen B. Kennedy) — Fri, 29 Jul 2022 18:29:07 +0000

“Gobsmacked” best describes the mood among congressional Democrats and environmental advocates yesterday. After months of difficult negotiations with Sen. Joe Manchin (D.-W.Va), a small group of senators secured his support for a $369 billion climate package that is part of the Inflation Reduction Act of 2022.

The bill still faces some obstacles. All fifty Senate Democrats must vote in favor of the bill next week, and that means showing up in person at a time when lawmakers have been sidelined by COVID. Plus, Sen. Kyrsten Sinema (D-Ariz.) still has not given her approval; the word is that she bristled at being left out of the negotiations. Plus, it will have to pass the House, where the Democrats’ margin is thin.

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But for companies that prioritize environmental, social and corporate governance, the bill has substantial promise – and could give their shares a boost. Here’s why.

Electric vehicles (EVs) are flying off dealer lots, but they still typically cost more upfront than gas-powered cars. The climate package would extend and modify the tax credits that have been available to offset these higher costs. From an investors’ point of view, the most significant change is that a popular tax credit (extended to the car buyer) of up to $7,500 on new EVs would again be available on some models. Because Tesla (TSLA) and General Motors (GM) had already exhausted their allotted tax credits, this renewal would allow some buyers to potentially claim the $7,500 tax credit. For example, the base price of a new Model 3 Tesla would drop from about $47,000 to $39,500. Expect Tesla and GM’s sales performance to benefit as well, assuming the auto companies can secure the battery components and semiconductor chips necessary to keep up with demand. Note also that the new bill would impose income limits ($150,000 adjusted gross income for singles, $300,000 for couples) on claiming that credit, plus impose caps on the cost of the vehicle itself ($80,000 MSRP for trucks, $55,000 MSRP for cars).

Homeowners can receive up to $1,200 per year for insulation projects, $2,000 for installing heat pumps (which provide highly efficient heating and cooling) and $600 per year for efficient windows. U.S. heat pump manufacturers like Carrier Control (CARR) may also receive tax incentives. And homeowners at risk from coastal flooding or wildfires could benefit from the bill’s grants to protect coastal communities and create fire-resilient forests.

The renewable energy power sector would enjoy tax credits that could be applied to any type of low- or zero-carbon technology, such as wind or solar projects. Unlike past incentives that expired every couple of years, often undermining the industry’s ability to plan and grow, these tax incentives would last for ten years.

Domestic manufacturing of energy transition products, like solar panels, EV batteries, and wind turbines, would also benefit. First Solar (FSLR) said it would consider expanding US manufacturing if the deal passes.

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Overall, investors with a focus on a transition to a low-carbon economy should enjoy a boost if the Inflation Reduction Act passes. After being trounced by high fossil fuel prices and piled on by critics over the past few months, ESG investors may shortly have their day in the sun.

Stock Market Today: Stocks' Momentum Stalls After Shocking Snap Earnings

karee.venema@futurenet.com (Karee Venema) — Fri, 22 Jul 2022 20:17:57 +0000

The Nasdaq's impressive multi-day winning streak came to a screeching halt on Friday as a negative earnings reaction for social media stock Snap (SNAP, -39.1%) weighed on the broader tech sector.

The parent company of photo-sharing app Snapchat last night reported its weakest quarter ever for revenue growth (+13% year-over-year to $1.11 billion). SNAP also swung to a per-share loss of 2 cents from earnings of 10 cents per share in Q2 2021, while daily active users were up 18% to 347 million. All three metrics fell short of what Wall Street was expecting. Additionally, the company said it will "substantially" slow hiring in order to cut costs.

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Twitter (TWTR, +1.1%) earnings were also in focus today. Ahead of today's open, the social media platform said second-quarter revenue fell 0.8% year-over-year to $1.18 billion – coming up well short of analysts' estimates – with advertising revenue rising just 2% for the three-month period.

The company's revenue was "hurt by a tougher ad landscape, as well as negative implications related to the pending Elon Musk acquisition," says CFRA Research analyst Angelo Zino. "While it is impossible to decipher the exact impact Musk's actions have had on TWTR, we think results do provide additional support that Elon has had a notable detrimental impact on the company's fundamentals." As for "Musk's actions," the analyst is referring to the Tesla (TSLA, -0.2%) CEO terminating his $44 billion buyout of Twitter, which is resulting in a court battle between the two parties.

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After three straight sessions of solid gains, the tech-heavy Nasdaq Composite slumped 1.9% to end at 11,843. The S&P 500 Index (-0.9% at 3,961) and Dow Jones Industrial Average (-0.4% at 31,899) also snapped their three-day win streaks.

Despite today's negative price action, all three major benchmarks ended higher on a weekly basis.

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 shed 1.6% to 1,806.
U.S. crude futures slumped 1.7% to end at $94.70 per barrel.
Gold futures rose 0.8% to end at $1,727.40 an ounce.
Bitcoin retreated 2.6% to $22,588.60. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Verizon Communications (VZ) was the worst Dow Jones stock today, sinking 6.7% after the telecommunications company reported lower-than-expected second-quarter earnings of $1.31 per share and cut its full-year forecast. Q2 revenue of $33.79 billion came in just above the consensus. " We believe VZ is currently between a rock and a hard place," says CFRA Research analyst Keith Snyder (Sell). "On the one side you have AT&T (T), who is being extremely aggressive with promotions, and on the other, you have T-Mobile (TMUS), who has a vastly superior 5G network currently.
American Express (AXP) gained 2.0% after the credit card company reported earnings. In its second quarter, AXP brought in earnings of $2.57 per share on $13.4 billion in revenue, more than analysts were expecting. The company also boosted its full-year revenue forecast. "We are maintaining our Buy rating on American Express following Q2 earnings, which were helped by a continued strong rebound in billed business, but hurt by a $1 billion swing in credit costs with a $410 million loss provision versus a $606 million credit loss recapture," says Argus Research analyst Stephen Biggar.

Next Week Will Be a Busy (and Potentially Volatile) One

There's plenty on tap next week that could spark further volatility in markets. For starters, we're entering the busiest week of the second-quarter earnings season so far, with several mega-cap tech names – such as Apple (AAPL) and Microsoft (MSFT) – set to report. Wall Street will be watching to "see how margins are holding up in the previous stock-market darlings, and hoping they paint a prettier picture than the underperformance from U.S. banks," says Sophie Lund-Yates, equity analyst at U.K.-based financial firm Hargreaves Lansdown.

In addition, the Federal Reserve will issue its latest policy decision at 2 p.m. Eastern time on Wednesday, July 27, with a press conference from Fed Chair Jerome Powell to follow.

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"The market response will likely be closely tied to comments during the press conference and updated summary of economic projections," says Timothy Chubb, chief investment officer at registered investment adviser Girard, a Univest Wealth Division.

The market is currently pricing in a 75 basis-point (a basis point is one-one hundredth of a percentage point) rate hike, and any deviation from this could spark a reaction, Chubb says. He adds that other significant market moves could "be associated with commentary or language that suggests the current rate of tightening policy is either too much or not enough to break the back of inflation."

Investors looking for sturdier ground amid stormier days can find it in some of the more defensive sectors, such as healthcare and real estate investment trusts (REITs), which tend to be able to withstand roller-coaster markets thanks to stable growth and attractive dividend yields. But for more ideas, check out this list of 43 top stocks for a tumultuous market, compiled by strategists at UBS Research Management. The names featured here are the firm's highest-conviction picks to ride out periods of volatility.

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Stock Market Today: Nasdaq Leads Again as Tesla Stock Pops

karee.venema@futurenet.com (Karee Venema) — Thu, 21 Jul 2022 20:33:41 +0000

Investors sifted through a busy news cycle on Thursday and decided they liked what they saw, with stocks ending higher for a third straight day.

Things got started early this morning on word that the European Central Bank (ECB) lifted interest rates by a higher-than-expected 50 basis points (a basis point is one-one hundredth of a percentage point). The rate hike marks the first for the ECB in 11 years, and comes as the central bank attempts to battle sizzling inflation and slowing economic growth across the eurozone.

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Back at home, the earnings calendar remained in focus, with the latest quarterly results from Tesla (TSLA) garnering notable attention. The maker of electric vehicles reported second-quarter earnings that beat analysts' consensus estimate, though they fell short on revenue.

"The company was clearly profitable this quarter," says Wes Gottesman, market advisor at Web3 trading platform TradeZing. "However relative to other quarters, the automotive revenue was down to $14.6 billion, as compared to the previous quarter's $16.9 billion. The culprit clearly being the shutdowns in Shanghai, and cutbacks in production/deliveries. That was the issue for this quarter, at no fault of their own. Their gross margins are at 25%, which means they have significant pricing power, while increasing production. Tesla also has a strong solar energy component which will continue to prosper as the world transitions to solar energy."

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In addition, TSLA sold roughly three-quarters of its Bitcoin purchases in Q2. The move was made to "maximize" the company's cash position, CEO Elon Musk said in the earnings call. He added that Tesla is "open to increasing" its Bitcoin holdings in the future, and that "this should not be taken as some verdict" on the cryptocurrency. TSLA did not sell any of its Dogecoin, according to Musk.

Still, Bitcoin fell 2.0% to 23,197 on that news (Bitcoin markets don't close; price taken at 4 p.m. ET.), while TSLA shares soared 9.8%. Tesla's rally helped the broader stock market brush off news that President Joe Biden tested positive for COVID-19, with the Nasdaq Composite gaining 1.4% to 12,059. The S&P 500 Index rose 1.0% to 3,998, while the Dow ended up 0.5% at 32,036.

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 added 0.5% to 1,836.
U.S. crude futures shed 3.5% to settle at $96.35 per barrel.
Gold futures rose 0.8% to end at $1,713.40 an ounce.
AT&T (T) plunged 7.6% after the telecom firm lowered its full-year free cash flow guidance to $14 billion from $16 billion, "to reflect heavy investment in growth and working capital impacts related to timing of collections," the company said in its press release. This overshadowed T's higher-than-expected adjusted earnings of 65 cents per share and revenue of $29.6 billion in the second quarter.
Travel stocks struggled today following negative earnings reactions for American Airlines (AAL, -7.4%) and United Airlines (UAL, -10.2%). While AAL posted its in-line earnings per share of 76 cents on higher-than-expected revenue of $13.42 billion, it cut third-quarter capacity, now expecting to fly 8%-10% below what it did in Q3 2019. And UAL recorded a slimmer-than-anticipated second-quarter loss of $1.43 per share, but revenue of $12.11 billion fell short of the cosensus estimate.
Data from the Labor Department showed jobless claims rose 7,000 on a weekly basis to 251,000 – the most since last November. Still, this did little to move markets today. "With earnings season in full swing and the ECB announcing its first-rate hike in more than a decade, the slight tick up in jobless claims may take a backseat in investors' minds," says Mike Loewengart, managing director of investment strategy at E*Trade. "But with jobless claims on an upward trend over the last month, some may question if the labor market will start to factor in more to the Fed's plan as it works aggressively to tame inflation."

A "Best-of-Both-Worlds" Scenario for Investors

Mid-cap stocks were another area of the market where investors found green ink today. This group of equities (typically firms with market capitalizations that fall between $2 billion and $10 billion) have been quietly holding their own in recent weeks, up 0.8% today and 6.7% so far this quarter.

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Often, mid caps are overlooked by those seeking out larger-cap names for stability or small-cap stocks for growth. Yet, this area of the market can provide investors a "best-of-both-worlds" scenario: higher growth potential than large caps and less volatility than smaller cap names.

And in the current backdrop of "a fast-moving business cycle and global central bank tightening," investors should consider mid-cap stocks, say Wells Fargo Investment Institute strategists; specifically, those with "the potential to post stable, high-quality earnings." Here, we've put together a list of the best mid-cap stocks to buy for these very qualities. What's more, each enjoys top ratings from Wall Street's pros.

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Twitter Earnings on Tap, But All Eyes on Musk Court Battle

karee.venema@futurenet.com (Karee Venema) — Mon, 18 Jul 2022 10:33:05 +0000

The second-quarter earnings season got off to a rocky start last week following disappointing reports from several big banks. Wall Street will stay focused on how the financial sector fared over the three-month period, but notable names from other corners of the market are featured on this week's earnings calendar, as well. Among them are communication services stocks Twitter (TWTR, $37.22) and Netflix (NFLX, $185.77), as well as healthcare giant Johnson & Johnson (JNJ, $177.76).

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"The communication services sector has recorded the second-largest percentage decrease in estimated earnings of all eleven sectors since the start of Q2," says John Butters, senior earnings analyst for FactSet. "As a result, the estimated (year-over-year) earnings decline for this sector is now 9.1%, compared to an earnings growth rate of 0.3% on March 31."

As for healthcare stocks, FactSet data points to a more modest estimated earnings decline of 0.2%.

But John Lynch, chief investment officer for Comerica Wealth Management, suggests that company guidance could be more important than the actual reported profits this time around, particularly as it relates to the impacts of inflation, slowing growth, the Ukraine war and the Fed's monetary policy. "We believe each of these areas will weigh on sales and margins in the coming quarters, suggesting consensus estimates are too optimistic going forward," Lynch says.

Twitter Q2 Earnings Set for Sizable Drop

The path forward will certainly be top of mind for investors when Twitter unveils its second-quarter earnings report before the July 22 open.

Analysts, on average, are looking for the social media platform to report second-quarter earnings of 15 cents per share, down 25% year-over-year (YoY). Revenue is expected to arrive at $1.3 billion (+23.8% YoY).

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But updates surrounding Twitter's looming court battle with Tesla (TSLA) CEO Elon Musk will really be what Wall Street is waiting for. Specifically, on July 12, the company filed a lawsuit against Musk after he said he is terminating his $44-billion dollar deal to purchase the company. TWTR alleges that the billionaire "refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests."

"The Street and legal experts across the board view Twitter as having a strong upper hand heading into the Delaware court battle after months of this fiasco and nightmare playing out since April," says Wedbush analyst Daniel Ives (Neutral). The analyst says there are "a range of possibilities" that can come from the lawsuit, including settlement or the enforcement of a deal.

"For now, Twitter's stock will continue to trade as a standalone basis as the long and ugly courtroom battle now begins to play out in Delaware courts," he adds.

It should be noted, however, that Twitter previously said per a July 13 press release that it will not be hosting a conference call after its Q2 results.

Netflix Subscriber Losses Main Focus for Q2 Earnings

Netflix has had its fair share of drama in 2022, with shares down more than 69% for the year-to-date. A significant portion of these losses came in the wake of the streaming service's Q1 earnings report, when it unveiled its first subscriber loss in over a decade.

But in Q2, Wedbush analyst Michael Pachter believes NFLX will report fewer subscriber losses than initially feared. He estimates a 1.5 million global net streaming loss, versus guidance for a net streaming loss of 2.0 million.

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"We think that Netflix is positioned to exceed its guidance for Q2, particularly because of the staggered release date for Stranger Things 4, which has very strong viewership," Pachter says. "While it is possible that the company will once again issue downbeat guidance for Q3, we think that the staggered release dates limited churn at quarter end and once again."

Additionally, the analyst – who has an Outpeform (Buy) rating on NFLX – says there is "clearly significant upside" to the stock following its recent selloff.

Overall, consensus estimates for Netflix's second-quarter report – due out after Tuesday's close – are for earnings of $2.96 per share (-0.3% YoY) and revenue of $8.0 billion (+9.5% YoY).

Forex Headwinds Biggest Swing Factor for J&J Earnings

Johnson & Johnson is one of just a handful of Dow Jones stocks trading in positive territory for the year-to-date, with shares up around 3.8%.

"U.S. Biopharma continues to trade defensively despite volatility in the broader market mostly due to solid sector fundamentals," says BofA Global Research analyst Geoff Meacham. "Indeed, even with a lingering COVID-19 impact, forex volatility and rising inflation, biopharmas have been thus far resilient to macro stresses in the first half of 2022."

Meacham adds that JNJ's second-quarter earnings report, which will be released ahead of the July 19 open, could help set the tone for the sector.

"Overall, we aren't expecting many surprises with JNJ likely to reiterate 2022 guidance, with forex headwinds the biggest swing factor," the analyst says. As far as segments go, he's upbeat on pharma and consumer, but expects to see a decline in revenue for medical devices due to continuing dynamics in procedure volume.

Analysts' average estimates for Johnson & Johnson's Q2 report include earnings of $2.57 per share (+3.6% YoY) and revenue of $23.8 billion (+2.2% YoY).

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Stock Market Today: Nasdaq Snaps Win Streak as Twitter Drags on Tech

karee.venema@futurenet.com (Karee Venema) — Mon, 11 Jul 2022 20:30:24 +0000

Stocks closed lower on Monday following weekend reports that China initiated a new round of restrictions to combat rising cases of COVID-19.

The directives included a week-long shutdown of non-essential businesses in the Chinese gambling hub of Macau, which sent casino stocks tumbling. Wynn Resorts (WYNN, -6.5%) and Las Vegas Sands (LVS, -6.3%) were among the notable decliners.

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The news out of China also weighed on oil prices, with U.S. crude futures shedding 0.7% to end at $104.90 per barrel.

"Oil prices are weakening as crude demand outlook is hit by a one-two punch from China's rising COVID cases and Wall Street jitters that inflation is hitting the U.S. economy much harder than analysts were expecting," says Edward Moya, senior market strategist at currency data provider OANDA. "Oil will struggle to hold the $100 level if China's COVID situation deteriorates much further."

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In terms of the sector logging the worst performance to kick off the trading week, that distinction easily went to communication services, which fell 3.0% amid an 11.3% drop in Twitter (TWTR) stock. Shares in the social media platform were hit by reports that Tesla (TSLA, -6.6%) CEO Elon Musk will terminate his $44 billion purchase of Twitter.

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TWTR's decline bled into other sectors, with Alphabet (GOOGL, -3.1%), Amazon.com (AMZN, -3.3%) and Meta Platforms (META, -4.7%) all chalking up big losses.

The widespread selling snapped the Nasdaq Composite's five-day win streak, as the tech-heavy index finished off 2.3% at 11,372. The S&P 500 Index declined 1.2% to 3,854 and the Dow Jones Industrial Average retreated 0.5% to end at 31,173.

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 slumped 2.1% to 1,732.
Gold futures declined 0.6% to finish at $1,731.70 an ounce.
Bitcoin shed 6% to $20,497.90. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Lululemon Athletica (LULU) fell 4% after Jefferies analyst Randal Konik downgraded the yoga apparel maker to Underperform (Sell) from Hold. The analyst cited concerns over LULU's "sky high" sales per square feet, as well as rising competition in an increasingly crowded space. "We believe there is limited upside ahead, especially as recession risks rise, and there is uncertainty as it relates to the performance of footwear and MIRROR [LULU's home gym], limiting visibility," Konik says.

Another Inflation Update on Deck

So, what's in store for this week? A lot, that's for sure. In addition to the start of second-quarter earnings season, inflation data will remain front and center. The Labor Department will release its consumer price index (CPI) for June on Wednesday morning, with last month's red-hot reading (CPI rose 8.6% year-over-year, the fastest annual pace since December 1981) still fresh on investors' minds.

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Regardless of what happens, Tony DeSpirito, CIO of BlackRock's U.S. Fundamental Active Equities, believes that it's best to take a more defensive positioning. "This includes owning energy and financials," DeSpirito says, while also adding "healthcare for a dose of resilience."

Indeed, healthcare stocks are especially helpful as an inflation hedge becaue they can pass higher prices along to consumers. Read on as we explore a dozen healthcare names that are poised to do well in almost any market condition.

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Stock Market Today: Stocks Finish Mixed After Boffo Jobs Report

Kyle Woodley — Fri, 08 Jul 2022 20:10:23 +0000

A whopper of a June jobs report landed in Wall Street's lap Friday morning, and it kept investors and traders guessing all session.

Anyone looking to the Bureau of Labor Statistics' latest employment situation for signs of a coming recession walked away mighty disappointed. The U.S. added 372,000 nonfarm payroll jobs last month, shattering consensus forecasts for 265,000. The unemployment rate held firm at 3.6% for the fourth consecutive month. And aggregate hours worked by private workers was up another 2.6% annualized during 2022's second quarter, following 3.4% annualized growth in Q1.

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"You just don't see that in a recession," says Bill Adams, chief economist for Comerica Bank.

Indeed, Adams believes between that and average monthly payroll job growth of 457,000 during the first half of the year, "it would be no surprise to see the first quarter's contraction in GDP revised to growth as statistical agencies get more complete information to measure the economy; GDP is hard to measure in real time and subject to many revisions."

This good news for the U.S. economy got a more nuanced reaction from the stock market, as some experts think the Federal Reserve could continue an aggressive pace of interest-rate hikes if the economy has strength to bear them.

Jason Pride, chief investment officer of private wealth at wealth management firm Glenmede, says of the central bank's dual mandate of full employment and low inflation: "For the time being, [full employment] appears intact, affording the Fed the flexibility to tackle its price stability goal head-on. While next week's [consumer price index] print will be the next important indicator to watch, today's jobs report likely gives the Fed headway for another 75-basis-point rate hike later this month."

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Stocks swung between shallow losses and gains throughout the day before settling with mixed results. The Nasdaq Composite (+0.1% to 11,635) closed in the black for the fifth consecutive session. However, Friday marked the end of winning streaks for the Dow Jones Industrial Average (-0.2% to 31,338) and S&P 500 (down marginally to 3,899).

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 was marginally lower to 1,768.
U.S. crude oil futures gained 2% to end at $104.79 per barrel, but still finished the week down more than 3%.
Gold futures edged up 0.2% to close at $1,742.30 an ounce. For the week, gold futures gave back more than 3%.
Bitcoin also finished with a tiny gain, of 0.1%, to $21,811.80. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Twitter (TWTR) fell 5.1% after a report in The Washington Post on Thursday suggested Tesla (TSLA, +2.5%) CEO Elon Musk's plans to buy the social media platform for $44 billion could fall through. Citing people familiar with the matter, the article said Musk's team has pulled back on talks with investors in recent weeks amid concerns over an unverified number of spam accounts on Twitter. "We believe the chances of a deal ultimately happening are currently at ~60% with a renegotiated bid at a lower price likely in the $42-$45 range due to the fake account issue," says Wedbush analyst Dan Ives, who has a Neutral (Hold) rating on TWTR stock. "There is still a ~35% chance Musk decides to walk away from the deal, try to pay the $1 billion breakup fee, and likely end up in a nasty court battle with Twitter's Board for the coming months." As for the current bid of $54.20 per TWTR share, Ives says that is "essentially out the window" at this point.
Upstart Holdings (UPST) was one of the biggest decliners on the Street today, shedding 19.7% after the consumer lending firm last night lowered its second-quarter revenue guidance, now expecting sales to arrive around $228 million compared to its previous forecast of $295 million to $305 million. UPST also said its quarterly net loss will range from $27 million to $31 million, wider than its prior guidance for a loss of $4 million to $0 million. In a press release, Dave Girouard, co-founder and CEO of Upstart, pointed to "inflation and recession fears" that have driven interest rates up and put banks and capital markets on cautious footing." Wedbush analyst David Chiaverini maintained an Underperform (Sell) rating on UPST stock. "The company has yet to operate through a true recession which means its underwriting model has yet to be battle-tested," the analyst says. "We fear that weakening delinquency and loss trends combined with macro- and geopolitical risks could lead to waning appetite from Upstart's credit buyers and the securitization market."

What Do Q2 Earnings Have in Store?

Coming up next week: the start of a pivotal second-quarter earnings season. The earnings calendar will kick off with reports from the likes of Delta Air Lines (DAL), JPMorgan Chase (JPM) and UnitedHealth Group (UNH). And despite Friday's encouraging employment news, a broader cadence of data pointing toward an eventual recession has some gloomy about the coming earnings season.

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Lindsey Bell, chief markets and money strategist for Ally Invest, isn't necessarily one of them.

"There are plenty of reasons to be cautiously optimistic heading into what could be a volatile Q2 earnings season," she says. "Several companies have already cut profit outlooks while others have hinted at the broad economic backdrop being not so bad. With estimates having been reduced in some key sectors and stock prices down big from earlier this year, the bar might be low enough to spark a near-term rally."

Cautious sentiment is often best met with prudent positioning. You ultimately want your portfolio to be able to harness any surprise upside without gambling on unproven stocks with lousy fundamentals.

One way to thread that needle can be found within the Dividend Aristocrats. A reminder: The Aristocrats are a group of 65 dividend stocks that have raised their annual payout in each of the past 25 years – at a minimum. But even within this subset of income-producing royalty, you can give yourself an even higher chance at success.

The 12 Dividend Aristocrats we're featuring today don't just have a fantastic dividend track record – they're also trading at fire-sale prices and boasting higher yields than they historically do. Take a look.

This is Senior Investing Editor Kyle Woodley, letting you know it's my final day with Kiplinger. I'm extremely grateful for getting to serve Kiplinger readers for the past few years, and I wish you both good health and good fortune.

The 22 Best ETFs to Buy for a Prosperous 2022

Ron Baron: A Fund Legend Shares Stock-Picking Secrets

kiplinger@futurenet.com (Andrew Tanzer) — Wed, 22 Jun 2022 20:50:31 +0000

Ron Baron is chairman, CEO and portfolio manager at Baron Capital, the investment firm he founded in 1982. Read on as we ask the master of Baron Funds about what he looks for in growth companies, what he emphasizes to his portfolio managers and analysts and the stocks he likes now.

You're a master of growth investing, which involves finding companies with prospects for faster-than-average profit growth, among other measures. What do you look for? Everyone can understand what a growth company is. What is hard for most people is being able to understand competitive advantage – the most important thing. That's something you can't figure out with an algorithm. You need to understand a business, how it operates and what makes it difficult for others to compete. It may have a license, patents or a head start in technology.

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For example, Tesla's (TSLA) competitive advantage is in its culture of rapid innovation. Tesla has a 10-year lead making batteries and electric cars; it has revolutionized an entire industry.

We make investments on the basis of what we think a business will be worth in five or 10 years as opposed to what it's worth right now. Our goal has been to double our money about every five or six years. We have been able to accomplish that by investing for the long term in businesses that we believe are competitively advantaged and managed by exceptional people. We worry about businesses, not about stocks and stock markets.

What do you emphasize to your portfolio managers and analysts? I tell them two things are critical. Number one is competitive advantage. Number two is management, the people who run the businesses. Those executives must be talented, really smart, great leaders, hardworking, inspirational and possess vision. You judge that by meeting people. That's table stakes, getting into the game.

The other thing – which is probably more important than anything else – is whether you can trust the individuals. That judgment requires experience. One of the questions I ask our analysts is, "If your family's well-being was completely dependent upon the success of the business in which you are recommending we invest, what would you need to know to make such an investment? Question everything."

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Why did you become such a long-term investor? When I began my career as a young analyst for brokerage firms in 1970, I recommended growth companies like Disney (DIS), McDonald's (MCD), Federal Express (FDX) and Nike (NKE) to institutional clients of those brokerage firms. After those stocks quickly doubled or tripled, I recommended selling. My compensation was based on commissions, not on the long-term success of businesses I recommended. When I looked back on all those 1970s sell recommendations, virtually all of the stocks were dramatically higher. I then concluded that what was important in becoming a successful investor was being able to buy and hold great growth companies for the long term.

We started Baron Capital in 1982 to do just that. We then believed, and still do, that most fund managers and analysts can't invest and recommend for the long term because they are under pressure to perform every day. We have been able to become long-term investors because, for 40 years, we have established an exceptional track record. Performance of very few others has exceeded benchmark returns, but 98.5% of Baron's assets have beaten stock-market returns over the long term, often by several percentage points annually.

What stocks do you like now? We like Hyatt Hotels (H, $92). [Prices are as of June 3.] It has made terrific deals to manage all-inclusive resorts while selling real estate to reduce its fixed assets. Vail Resorts (MTN, $257) is becoming a subscription business, with most revenues coming from season-pass sales in advance of ski season. Real estate company CoStar Group (CSGP, $63) is investing in digital residential real estate services. MSCI (MSCI, $438) is a unique index provider with strength in environmental, social and governance risk metrics. And Space Exploration Technologies has an amazing opportunity to launch enough satellites to provide worldwide internet access. SpaceX is private, but it is a major holding of the Baron Partners (BPTRX) and Baron Focused Growth (BFGIX) funds.

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Do you ever hold on to stocks that underperform for a few years? Yes. That is often the case. Tesla is one example. We invested $380 million in Tesla from 2014 to 2016. Although we believed we could earn 20 times our money over 10 years, we regarded it as a risky investment at the time, so we invested less than 2% of our firm's assets in the stock.

We considered it risky because manufacturing cars is a highly regulated, capital-intensive business, and few thought Elon Musk's electric car business would be successful, especially because financially powerful car companies and their dealers and unions, oil companies, hedge funds, and politicians were aligned against this business. During the following five or six years, Tesla's sales increased tenfold. Its share price, however, although extremely volatile, changed little over most of that period.

We were right, and Tesla's sales have continued to increase dramatically. From 2019 to 2021, Tesla's share price increased about 20 times, and we have earned about $7 billion on our initial investment. We expect to make at least three to five times our money again over the next 10 years.

When and why do you sell stocks? We sell principally for three reasons. First, if an investment becomes very successful and, as a result, represents too large a percentage of diversified portfolios, we gradually reduce holdings.

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We have sold about $1 billion of Tesla shares, about 15% of our investment in that company. Second, the return that we require – our "hurdle rate" – in most instances is a potential double in five or six years. We believe that most of the time we can accomplish that return by investing in businesses that can increase profits, cash flow and other drivers of value by 15% per year. If a company's growth rate slows to 7% to 8% per year as it matures, it becomes a candidate for sale. Finally, if we determine we have made a mistake, we sell as quickly as humanly possible.

Do you spend any time looking at interest rates, forecasts for gross domestic product and other macroeconomic indicators? Macro judgments are not an important part of our process. I can't predict when there's going to be a recession, and I believe neither can anyone else. I can't predict when the market's going to go up and neither can anyone else.

I've been doing this for 52 years, and in that entire period I've never seen anyone consistently and accurately predict what the economy or stock market is going to do. No one. Not Warren Buffett. Not Elon Musk. Not my friend [former Fidelity mutual fund manager] Peter Lynch. Certainly not me. Most investors try to predict what I believe you can't predict – interest rates, oil prices, wars, election outcomes.

One thing we are certain about is inflation. Inflation is a big deal and always has been. During my 52-year career and 79-year lifetime, inflation has averaged about 4% or 5% per year, according to my analysis of my personal cost of living. This means that the value of your money falls in half about every 14 or 15 years. We invest in growth stocks to hedge against the decline in the purchasing power of our money and to participate in the growth of our country's economy. Inflation will be higher sometimes, lower sometimes, but it's always going to be there.

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Stock Market Today: Stocks Start Short Week With a Snap-Back

Kyle Woodley — Tue, 21 Jun 2022 20:14:30 +0000

A light-news Tuesday gave the stock market the breathing room it needed to mount an aggressive rebound rally.

Whether the rally is of the short-lived "relief" variety remains to be seen. Today's widespread bullish action came on the heels of a 5.8% drop in the S&P 500 last week – the second consecutive 5%-plus decline for the index, which is a rarity (more on that in a moment).

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There wasn't much in the way of news that would otherwise justify a powerful move upward. Existing-home sales for May dropped by 3.4% month-over-month to a seasonally adjusted annual rate of 5.41 million, which was just a tick higher than estimates for 5.40 million. Year-over-year, existing-home sales were down 8.6% – a stark contrast to the 45.5% YoY jump in May 2021. Median home prices were $407,600 in May, up from $395,000 in April.

"Sales of higher priced homes are holding up, but sales of homes under $500,000 are falling as higher interest rates price more buyers out of the market," says Bill Adams, chief economist for Comerica Bank. "Higher income and wealth households have been less sensitive to the rise in rates so far, cushioning sales at the high end, but this segment will likely soften too with stocks in a bear market."

Tops on Tuesday were energy stocks (+5.2%), led by Exxon Mobil (XOM, +6.2%) and Diamondback Energy (FANG, +8.2%). U.S. crude oil futures improved by 1.0%, to $110.65 per barrel, after Exxon CEO Darren Woods said he expected three to five years of tight oil markets.

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Tesla (TSLA, +9.4%) – up by double-digits after CEO Elon Musk said the company's biggest hurdle wasn't competition, but supply-chain issues – also helped consumer discretionary stocks pull off a 2.9% return.

The Nasdaq Composite was out in front of a wide recovery, up 2.5% to 11.069. It was followed closely by the S&P 500 (+2.5% to 3,764) and Dow Jones Industrial Average (+2.2% to 30,530).

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 flew 1.7% higher to 1,694.
Gold futures shed 0.1% to settle at $1,838.80 per ounce.
Bitcoin had a whirlwind weekend, dipping below $18,000 at its nadir but recovering to $20,889.75, a 1.8% improvement from Friday afternoon's level. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Palantir Technologies (PLTR) jumped 5.7% after BofA Securities analyst Mariana Perez Mora intiated coverage on the big data analytics stock with a Buy rating and a $13 price target, nearly 50% above today's close at $8.71. "We see Palantir as a beneficiary of rapidly growing demand for AI-platforms in both commercial and government end-markets," the analyst says. "Palantir's dominant position in the AI-powered software market, differentiated end-to-end & highly-secure solutions and first mover advantages should support more than 30% annual revenue expansion and improving profits in the midterm." Perez Moya also points to "increased urgency on modernizing military and intelligence capabilities," which she believes will create significant opportunity for PLTR stock.
Spirit Airlines (SAVE, +7.9%) got a lift today after JetBlue Airways (JBLU, -1.6%) raised the buyout offer for its discount airline peer by $2 per share to $33.50 per share. The offer includes $1.50 per share too cover part of the breakup fee for Frontier Group Holdings' (ULCC, +1.6%) $2.9 billion bid for Spirit. JBLU also said it would be willing to commit to "significantly" more divestitures in order to gain regulatory approval. Spirit's board is expected to jdiscuss and vote on the competing bids at a shareholder meeting scheduled for next Thursday, June 30. "Spirit needs some near-term relief from its over indebtedness and overcommitted position on flight equipment purchases, in our view" says CFRA Research analyst Colin Scarola, who maintained a Hold rating on SAVE. "The JBLU offer won't provide that, but Frontier's can, in our view, making it likely Spirit shareholders opt for the Frontier offer. At any rate, Spirit shares remain extremely high risk, in our view."

Just How Long Will This Momentum Last?

So, about the market's big back-to-back weekly dips ...

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Michael Reinking, senior market strategist for the New York Stock Exchange, said Friday that the S&P 500's second consecutive week of 5%-plus declines – along with a few other signals – pointed to the possibility of a "tactical bounce," and that bounce did indeed materialize today.

"The week is still young, so it is way too early to declare victory, but let's take a look at just how rare back-to-back 5% declines are and what the return profile looks like going forward," he said Monday.

Double-digit declines have happened only eight times since 1970 – including twice during the Great Financial Crisis and a three-week streak in 1987 that Reinking counts as two instances. The following week was up in 7 of 8 instances by an average of 2.6% (the lone exception was the day before Black Monday) … but what happens after that oversold bounce?

"Returns in the intermediate term are more mixed, with returns three months later only higher in 38% of instances," he says. "However, that improves over time, with the average return one year later [roughly] 28%, with a median return of 18.5%."

A long way of saying to bottle up today's energy – there's no guarantee it willl last.

It also means investors setting their portfolios up for the rest of the year must continue with a discriminating eye. As we near 2022's midway point, we're focused on the top opportunities for the coming year. We've recently explored potential targets in specific areas such as small caps and real estate investment trusts (REITs), but today we're widening our scope to the entire market.

Read on as we look at the 15 best stocks from across the market that look poised for a sharp rebound after a difficult first six months.

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25 Best S&P 500 Stocks of the Pandemic Bull Market

kipdigital@futurenet.com (Dan Burrows) — Tue, 14 Jun 2022 18:55:48 +0000

The S&P 500's close below 3,837.25 on June 13 didn't just signal the birth of a new bear market – it also marked the death of the most recent bull market.

And what a bull it was.

But before we look back at the best S&P 500 stocks of the pandemic bull market (see the table below), let's take a moment to acknowledge this change in the cycle.

The 10 Best Stocks for a Bear Market

Active investors grappling with the official onset of a bear market might want to review the best stocks to buy for 2022, which are designed to account for a range of outcomes through year-end and beyond. Those same active investors also might want to consider adding names that tend to hold up well in down markets, such as the best stocks to buy for a bear market.

As for our now-defunct bull market, recall how improbable it seemed at the time. When COVID-19 first swept across the globe in early 2020, the S&P 500 lost more than a third of its value in little more than a month. And when the market did at last mercifully bottom on March 23, few at the time could guess that it was about to generate extended and stunning returns.

For the record, the pandemic bull market began on March 23, 2020, according to S&P Dow Jones Indices, and it ended on Jan. 3, 2022, which was the S&P 500's most recent – not to mention record – closing high.

Thus, our late, lamented bull market lived for 21.4 months – a period in which the S&P 500 increased 114.4% on a price basis and 120.4% on a total return basis (price appreciation plus dividends).

(Image credit: YCharts)

But as remunerative as the pandemic bull proved to be, it was truly distinguished by the rapidity of its gains.

The 15 Best Stocks to Buy for the Rest of 2022

Since World War II, there have been seven bull markets in which the S&P 500 increased at least 100%, says Ryan Detrick, chief market strategist at LPL Financial. The pandemic bull market holds the record for doubling in the shortest amount of time (or not quite 17 months), the strategist notes.

The Best S&P 500 Stocks of the Bull Market

Interestingly, most of the stocks that were the pandemic bull market's biggest early winners – work-from-home darlings, home improvement retailers, consumer staples giants – faded once COVID-19 began to release its grip.

As the table below shows, energy sector names and pandemic-recovery plays in the gaming industry make numerous appearances among the best S&P 500 stocks of the bull market. The financial sector is also amply represented.

And as for top-performer Tesla (TSLA, $647.21)? Remember that the bull market ended on Jan. 3. Shares in Elon Musk's electric vehicle company have lost more than 45% of their value ever since.

(Image credit: S&P Global Market Intelligence)

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Stock Market Today: Stocks Nudge Higher as Treasury Yields Spike

karee.venema@futurenet.com (Karee Venema) — Mon, 06 Jun 2022 20:37:41 +0000

Stocks opened the week's trading solidly higher amid reports that China is easing some of its COVID-related restrictions following a roughly two-month lockdown across several heavily populated areas of the country.

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Additionally, a report in The Wall Street Journal indicated Chinese officials are nearing an end to their probes into several U.S.-listed firms – including ride-hailing company Didi Global (DIDI, +24.3%) – adding to signs Beijing may be taking steps to boost economic growth.

"While there may be little excitement in the U.S. market, China's recent attempts to reassure support to domestic firms may have a positive impact on global bourses this week," says Kunal Sawhney, CEO of Australian research firm Kalkine Group. "Major technology stocks worldwide were trading higher on Monday after Beijing said it is concluding its DiDi Global probe. After the statement, ADRs of Alibaba Group (BABA, +6.2%), DiDi Global, Baidu (BIDU, +2.5%) and JD.com (JD, +6.5%) saw significant gains."

But the major benchmarks began easing back from their earlier gains by midday amid a spiking 10-year Treasury yield – which jumped 8.9 basis points (a basis point is one-one hundredth of a percentage point) to 3.044%, its highest level since December 2018.

Strength in the communication services (+0.04%) and consumer discretionary (+1.0%) sectors helped markets regain their footing in early afternoon trading, thanks in large part to a solid day for Amazon.com (AMZN). The e-commerce giant added 2.0% on the first day of trading following its 20-for-1 stock split.

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At the close, the Nasdaq Composite (+0.4% at 12,061) and S&P 500 Index (+0.3% at 4,121) were modestly higher. Meanwhile, the Dow Jones Industrial Average – which was up 1% at its session peak – eked out a 0.05% gain to end at 32,915.

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Monday's lurches could be a sign of what's to come for this week, says Dan Wantrobski, technical strategist and associate director of research at Janney Montgomery Scott. All eyes will be on this Friday's important consumer price index (CPI), slated for release at 8:30 a.m. ET. Until then, Wantrobski says, "expect volatile, choppy trading in both directions."

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 rose 0.4% to 1,889.
U.S. crude futures slipped 0.3% to end at $118.50 per barrel.
Gold futures gave back 0.3% to finish at $1,843.70 an ounce.
Bitcoin jumped 6.4% to $31,432.36. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
A lawyer for Tesla (TSLA, +1.6%) CEO Elon Musk sent a letter to Twitter (TWTR, -1.5%) accusing the social media platform of refusing Musk's data requests. The letter said Musk, who is a prospective buyer of Twitter, believes the company "is actively resisting and thwarting his information rights (and the company's corresponding obligations) under the merger agreement" to provide him with data regarding its active user base. "This stems back to last month when Musk said he was placing the deal on hold to seek greater clarification on the status of bots and fake accounts," says CFRA Research analyst Angelo Zino (Hold). "We continue to believe that Elon is playing hard ball, which makes complete sense (pending offer at $54.20 per share), to gain leverage/options to either reduce his offer price or indeed completely walk away if he gets cold feet (Musk did rush in and failed to do due diligence). Ultimately, we are finding it increasingly difficult to envision a scenario where this doesn't get settled in the courts."
Several solar stocks rallied today after the Biden administration said it would suspend tariffs on solar panel products from four countries – Cambodia, Malaysia, Thailand and Vietnam – for 24 months. Enphase Energy (ENPH, +5.4%), SolarEdge Technologies (SEDG, +2.9%) and Sunrun (RUN, +5.9%) were among those that gained ground.

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Recession risks are on the rise, but there is still time for investors to prepare. So say a team of strategists at Wells Fargo Investment Institute (WFII) in their latest investment strategy report.

"Recessions are a normal part of an economic cycle," writes Michelle Wan, investment strategy analyst at WFII. "Even though it is difficult to predict the timing and magnitude of one, there are signals cautioning investors so they can prepare portfolios ahead of a recession."

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Wan points to the Conference Board's leading economic indicators index, which measures the health of the U.S. economy via the labor market, credit market, stock market and new orders in manufacturing. The index is currently declining at a rapid pace, the strategist notes, signaling an "increased probability of a recession."

Investors looking to prepare their portfolios for such a scenario may want to consider gaining exposure to commodities or other defensive sectors, such as healthcare, consumer staples and utilities, Wan adds.

Another tactical approach for investors is to see what the smart money is doing. Institutional investors, hedge funds and billionaires have access to research and insights that most retail investors do not, which makes their top stock picks all the more enlightening to follow – particularly at a time of economic uncertainty. Read on as we take a closer look at 15 companies the billionaire class bought in the first quarter of 2022. While some of the names featured here are familiar blue chips, others maintain a much lower profile.

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Stock Market Today: May's Surprising Jobs Data Slams Brakes on Stocks

Kyle Woodley — Fri, 03 Jun 2022 20:16:12 +0000

It was a "good news is bad news" trading session Friday. Rather than cheer a better-than-expected May jobs report, investors pondered how the encouraging numbers would affect the Federal Reserve's path forward.

The Labor Department reported that May nonfarm payrolls grew by 390,000, which was much better than the 318,000 expected. It wasn't a perfect report – unemployment of 3.6% was above estimates of 3.5%, while average hourly earnings growth of 0.3% was below expectations for 0.4% – but it still fanned fears that America's central bank would need to keep up its hawkish bent for longer, meaning that stiff 50-basis-point interest-rate hikes could continue past the Fed's summer meetings.

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"The May employment report perfectly describes the current state of the economy. It is likely still expanding and jobs are still plentiful, but companies are facing elevated compensation costs as consumers grapple with inflation amid a tight labor market," says Shawn Snyder, Head of Investment Strategy at Citi U.S. Wealth Management. "However, the strength of the report is a double-edged sword for investors because a resilient economy will likely make the Fed confident that it can tighten monetary policy further."

Meanwhile, Rick Rieder, BlackRock's chief investment officer of global fixed income, sees a potential shift in May's report.

"The persistent headlines of major companies freezing hiring, or reducing staff are clearly indicative of a major change in forward business growth expectations," he says. "This is a watershed moment for the trajectory of payrolls and now directly places the spotlight on how deep this turn will be."

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Speaking of reducing staff, Tesla (TSLA, -9.2%) shares bombed after CEO Elon Musk said in an email Friday that he planned to cut 10% of the electric vehicle (EV) maker's roughly 100,000 jobs, citing a "super bad feeling" about the American economy. President Joe Biden, asked about Musk's take, countered by listing other automakers who were ramping up investments. "Well, let me tell you, while Elon Musk is talking about that, Ford (F, -2.8%) is increasing their investment overwhelmingly," he said, adding that Stellantis (STLA, -3.6%, formerly Chrysler) was also pouring more money into EVs.

Also dragging the market lower was Amazon.com (AMZN, -2.5%), which snapped a six-day, 20%-plus win streak – its best such run since early 2015.

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The broader indexes spent Friday retching up much of yesterday's gains. The Nasdaq Composite retreated 2.5% to 12,012, the S&P 500 finished down 1.6% to 4,108 and the Dow Jones Industrial Average dropped by 1.1% to 32,899.

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 was off by 0.8% to 1,883.
U.S. crude futures jumped 1.7% to settle at $118.87 per barrel.
Gold futures fell 1.1% to finish at $1,850.20 an ounce.
Bitcoin joined in Friday's downturn, declining 2.4% to $29,539.64. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
American Airlines (AAL) slumped 7.1% after the company updated guidance for several second-quarter metrics. While AAL said it expects revenue to be 11% to 13% higher than where it was in Q2 2019 – up from previous guidance of a 6% to 8% increase – it believes available seat miles in the second quarter, a measure of passenger carrying capacity, will be down 7% to 8% on a two-year basis, wider than its prior outlook for a decline of 6% to 8%. The air carrier also raised its average fuel cost estimate to a per-gallon range of $3.92 to $3.97 from $3.59 to $3.64. AAL dragged several other airline stocks lower today too, with Delta Air Lines (DAL, -3.6%), Spirit Airlines (SAVE, -1.8%) and United Airlines (UAL, -2.9%) among those losing ground.
CrowdStrike Holdings (CRWD) reported first-quarter adjusted earnings of 31 cents per share on revenue of $487.8 million, beating analysts' estimates for earnings of 23 cents per share and sales of $465.1 million. The cybersecurity firm also posted annual recurring revenue of $1.9 billion and free cash flow of $158 million – up 61% and 34% year-over-year, respectively. "Like its larger cybersecurity peers, CRWD argues that industry fundamentals are as strong as they've ever been," says UBS Global Research analyst Roger Boyd (Buy). "In addition, we see a market leading position, high degree of revenue visibility, strong balance sheet and cash flow generation as attributes that can help CRWD succeed in the current macro environment." Nonetheless, shares slid 6.9% today.

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The worry about 2022's slump is that you can't chalk it up to any one or two things – these losses truly are a team effort.

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"Rising inflation, supply chain woes, labor market troubles, dwindling consumer spending, and the general downcast sentiment in the economy are having a combined negative impact," says Kunal Sawhney, CEO of Australian research firm Kalkine Group. Though he adds that unease over runaway inflation is "almost contagious" and that investors "are also increasingly concerned that Fed's monetary tightening could trigger a recession."

As we've mentioned over the past couple of months, one of your best lines of defense is to position your portfolio to combat inflation. Stocks with exceptional pricing power, as well as investments that are either insulated or benefit from inflation, might be able to help investors ward off at least some continued stock-market losses.

But another tack to take is to evaluate the market's best long-term, dividend-paying investments, buy them on the dip, slap on an eye mask and noise-canceling headphones, and let compounding do its thing until you retire – or, if you're already in retirement, let the dividend checks help finance your post-career life.

OK, we jest: You shouldn't check out completely, but the point still stands that steady high-yield stocks like these 20 names can provide significant peace of mind when the market hits scary patches of turbulence.

Kyle Woodley was long AMZN as of this writing.

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Stock Market Today: S&P 500 Narrowly Escapes Bear Territory

Kyle Woodley — Fri, 20 May 2022 20:15:16 +0000

The S&P 500 made its closest brush with a new bear market yet, falling more than 20% from its all-time highs during Friday's intraday action before reversing course and actually finishing with a marginal advance.

Specifically, the 500-company index dropped as low as 3,810 – well below the 3,837 level that would mark a 20% drawdown from its Monday, Jan. 3, record highs and put it in an official bear market – but rebounded late in the session to eke out a gain of less than a point, to 3,901.

The 10 Best Stocks for a Bear Market

Among the stocks weighing on the market Friday was Tesla (TSLA, -6.4%), which sank to its lowest level since August 2021 following a Business Insider report claiming that CEO Elon Musk's privately held SpaceX "paid a flight attendant $250,000 to settle a sexual misconduct claim against Musk in 2018." Musk decried the article as "political," but it nonetheless acted as the cap on a difficult week for Tesla, which was just kicked out of the S&P 500's ESG index and is facing COVID lockdown headaches at its operations in China.

Meanwhile, Deere (DE, -14.1%) was clobbered despite topping both sales and earnings forecasts and raising its full-year profit outlook. The major criticism of its report? The farm-equipment manufacturer's sales outlook relies on having a strong second half of 2022, which isn't a certainty.

The Dow, like the S&P 500, closed with a marginal gain to 31,261. The Nasdaq declined 0.3% to 11,354 but finished well off its intraday lows.

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Dan Wantrobski – the technical strategist and associate director of research at Janney Montgomery Scott who said earlier this week that he was "encouraged" by Wednesday's washout – notes that while this drawdown might have lower to go, longer-term investors can begin sharpening their knives.

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"At 3,800, we do believe that the S&P 500 resides in a price range (3,600-4,000) that can lead to some attractive returns over the coming years," he says." He's not calling a bottom for short-term traders, but "investors who hold a long-term view can start to deploy sideline cash in small increments and build long positions for the intermediate- to longer-term timeframe."

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 declined 0.2% to 1,773.
U.S. crude oil futures gained 0.4% to settle at $110.28 per barrel.
Gold futures ended the day unchanged at $1,842.10 an ounce.
Bitcoin put together a small afternoon relief rally but still finished down $29,265.24. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Deckers Outdoor (DECK) jumped 12.6% after the maker of Ugg boots reported earnings. For its fiscal fourth quarter, DECK reported earnings of $2.51 per share on $736.0 million, up 113% and 31.2%, respectively, year-over-year. Both figures easily surpassed analysts' expectations, as well. "The company was able to offset supply chain disruptions by leveraging SG&A [selling, general and administrative expenses] in the quarter," says CFRA Research analyst Zachary Warring, who upgraded the retail stock to Buy from Hold. "The company continues to repurchase shares aggressively while maintaining a debt free balance sheet. We see this as an attractive entry point for shares as the company continues to execute and grow its HOKA brand well over 25% annually."
Ross Stores (ROST) followed in the footsteps of fellow retailers Walmart (WMT) and Target (TGT), plunging in the wake of its quarterly results. Shares spiraled 22.5% after the off-price apparel and home fashions retailer reported lower-than-expected earnings and revenue in its first quarter (97 cents per share actual vs. $1.00 per share est.; $4.3 billion actual vs. $4.5 billion est.), while same-store sales slumped 7% over the three-month period. However, the "big news from ROST's first-quarter earnings report was the company lowered its fiscal 2022 earnings per share guidance to $4.34-4.58 vs. $4.71-$5.12 prior and the Street's $5.01 view," says UBS Global Research analyst Jay Sole (Neutral). "The midpoint of the new range is 8% below ROST's full-year 2021 earnings per share and 3% below its full-year 2019 result." Sole adds that he does not believe today's pullback represents a buying opportunity, and that more guidedowns could be in store as inflation negatively impacts lower-income consumer demand. Quarterly results from retailers will continue to be in focus next week, with Best Buy (BBY) and Dollar General (DG) among the many names on the earnings calendar.

Make Your Portfolio Pay You Every Month

Regular readers of Closing Bell will note that this week, we've been pounding the table about the role dividends can play in helping investors absorb volatile downturns like the one we've suffered in 2022.

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We're not alone. Several strategists suggest loading up on dividend stocks in the current environment, including Gargi Chaudhuri, head of iShares investment strategy. "We see dividend stocks as an alternative source of quality, offering outperformance over the broad market, attractive yield for income, and diversified exposure to sectors benefiting from the current macro regime of high inflation and slowing growth," she says.

Most of our recommendations across the week have focused on dividend growth – namely, the S&P 500 Dividend Aristocrats, as well as their counterparts in Canada and Europe. That said, investors more interested in high current yield might find that the Aristocrats are a bit stingy. The ProShares S&P 500 Dividend Aristocrats (NOBL) exchange-traded fund, for instance, yields just 2% at current prices.

Those looking to load their cart with juicier yields might be better off eyeballing a different cohort: monthly dividend payers. Most U.S. dividend stocks tend to pay on a quarterly basis, but there are a select group of equities and funds that conveniently pay you just as frequently as you receive your bills – that is, once each month. Many of these monthly payers also tend to come from special classes, such as real estate investment trusts (REITs) and business development companies (BDCs) that pay much higher dividends than your average blue-chip stock.

Read on as we review a dozen of these generous monthly dividend names.

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Stock Market Today: Stocks Finish Lower as Traders Mull Recession Odds

Kyle Woodley — Mon, 16 May 2022 20:19:28 +0000

The potential for the U.S. to slip into recession was the topic du jour Monday as stocks kicked off the week with a wobbly, uneven session.

Over the weekend, former Goldman Sachs chief Lloyd Blankfein told CBS' Face the Nation that recession was "a very, very high risk factor." That opinion was met by a number of other calls Monday morning.

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Wells Fargo Investment Institute, for instance, says "our conviction is that the chances of an outright recession in 2022 remain low" but believes odds are growing that 2023 could see an economic contraction. UBS strategists say the chances are different depending on where you look – their global economists say "hard data" points to a sub-1% chance of recession over the next 12 months, but the yield curve implies 32% odds.

"There's no crystal ball to predict what's next, but historical trends can come into play here. With the [S&P 500] closing 15% below its weekly record, there's only been two times in the past 60-plus years that the market didn't fall into bear territory after a similar drop," adds Chris Larkin, Managing Director of Trading at E*Trade. "This doesn't mean it's bound to happen, but there is room for potential downside."

Larkin says to keep an eye on major retail earnings this week – which will kick off in earnest with Walmart's Tuesday report – to get a pulse check on the American consumer.

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Monday itself was a fairly quiet affair. Exxon Mobil (XOM, +2.4%) and Chevron (CVX, +3.1%) were among a number of plays from the energy sector (+2.7%) that popped after U.S. crude oil futures jumped another 3.4% to $114.20 per barrel.

Twitter (TWTR, -8.2%) shares dropped after Tesla (TSLA, -5.9%) CEO Elon Musk spent the weekend questioning how much of Twitter's traffic comes from bots. Wedbush analyst Daniel Ives said the move feels more like a "'dog ate the homework' excuse to bail on the Twitter deal or talk down a lower price." TWTR stock has now given up all its gains since Musk announced his stake in the social platform.

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The major indexes finished an up-and-down session with mostly weak results. The Dow Jones Industrial Average managed to eke out a marginal gain to 32,223, but the S&P 500 declined 0.4% to 4,008, while the Nasdaq Composite retreated 1.2% to 11,662.

Also worth noting: Warren Buffett's Berkshire Hathaway will file its quarterly Form 13F soon. Check back here tonight as we examine what Buffett has been buying and selling.

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 closed out the session with a 0.5% dip to 1,783.
Gold futures gained 0.3% to settle at $1,814 an ounce.
Bitcoin was off 1.6% to $29,551.92 (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
JetBlue Airways (JBLU, -6.1%) ramped up its hostile takeover attempt of Spirit Airlines (SAVE, +13.5%) on Monday, urging SAVE shareholders to vote against a buyout offer from fellow low-cost air carrier Frontier Group Holdings (ULCC, +5.9%). JBLU last month offered to buy Spirit Airlines for $33 per share – a premium to the $21.50 per share ULCC offered in February – but SAVE's board of directors rejected the bid citing concerns over regulatory approval. JBLU followed up in early May with an "enhanced superior proposal," including paying a $200 million, or $1.80 per SAVE share, reverse break-up fee should regulators block the deal.
Warby Parker (WRBY) fell 5.3% after the eyeglass maker reported a loss of 30 cents per share in its first quarter. This was much wider than the per-share loss of 3 cents the company reported in the year-ago period and missed the consensus estimate for breakeven on a per-share basis. Revenue of $153.2 million also fell short of analysts' expectations. WRBY did maintain its full-year revenue guidance of $650 million to $660 million. "We remain cautiously optimistic on shares as WRBY continues to show ability to grow the top line, open new stores, and is recession resistant as a lower cost option for non-discretionary spend," says CFRA Research analyst Zachary Warring (Buy). "We see the company leveraging SG&A to become profitable in the second half of 2022."

Check Out Europe's Dividend Royalty

If you're seeking out more stable opportunities amid an uncertain U.S. market … well, the rest of the world is admittedly looking pretty shaky, too. But that doesn't mean there aren't a few morsels worth a nibble.

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BCA Research notes that while there's negative news around the globe, "European benchmarks already discount a significant portion of the negative news." And looking ahead, inflation there is expected to peak over the summer "as the commodity impulse is decelerating" – that should help stagflation fears recede and help European shares.

Graham Secker, Morgan Stanley's chief European and U.K. equity strategist, chimes in that his firm remains "overweight [European] stocks offering a high and secure dividend yield."

We've previously highlighted our favorite European dividend stocks, which on the whole tend to produce higher yields than their U.S. counterparts.

But we'd also like to shine the spotlight on Europe's twist on an American income club: the Dividend Aristocrats. The S&P Europe 350 Dividend Aristocrats have somewhat different qualifications than their U.S. brethren, but in general, they've proven their ability to provide stable and growing dividends over time.

Read on as we look at the European Dividend Aristocrats.

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Could Musk's Twitter Buyout Hit the Skids?

Kyle Woodley — Fri, 13 May 2022 12:13:14 +0000

Anyone who expected turbulence amid Elon Musk's quest to acquire Twitter (TWTR) got precisely what they anticipated Friday morning, when the Tesla (TSLA) CEO tweeted that the Twitter deal was "temporarily on hold."

TWTR shares plunged roughly 10% early Friday following Musk's tweet, which linked to a May 2 Reuters story about Twitter's recent statement that "the average of false or spam accounts during the first quarter of 2022 represented fewer than 5% of our [monetizable daily active users] during the quarter."

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Musk later tweeted that he is "still committed to acquisition," which helped cut into the losses somewhat, though another seed of doubt was already sown.

"[Musk] is clearly intent in querying the company's estimate that spam accounts make up less than 5% of active daily users – a key metric given that establishing an accurate number of real tweeters is considered to be key to future revenue streams via advertising or paid for subscriptions on the site," says Susannah Streeter, senior investment and markets analyst for U.K. firm Hargreaves Lansdown.

But she also raises the possibility of an ulterior motive.

"There will also be questions raised over whether fake accounts are the real reason behind this delaying tactic, given that promoting free speech rather than focusing on wealth creation appeared to be his primary motivation for the takeover," Streeter says. "The $44 billion price tag [of the Twitter deal] is huge, and it may be a strategy to row back on the amount he is prepared to pay to acquire the platform."

That price tag might seem like even more of a stretch now than when Musk first got involved with Twitter.

"I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced," Musk said in April when he declared his bid for the social media platform.

Since then, the S&P 500 and the communication services sector have both declined by double digits, with many high-priced technology and tech-esque shares plunging precipitously.

Twitter, to be fair, is roughly flat since then. But this latest hurdle puts his once seemingly imminent Twitter deal even further in doubt among investors and analysts alike.

(Image credit: YCharts)

The market has yet to price TWTR shares at the $54.20 level Musk offered in April. Not even after Musk revealed earlier this month that backers such as Andreessen Horowitz, Sequoia Capital and Oracle (ORCL) founder Larry Ellison were lined up to help provide more than $7 billion in financing.

As of Thursday's close, TWTR shares were trading 15% below Musk's bidding price. In Friday's premarket trade, that number was nearly 30%.

Wall Street's pros appear mildly skeptical the Twitter deal closing, too. According to S&P Global Market Intelligence, the 27 analysts who currently cover Twitter have an average price target of $51.50 and collectively consider the stock a Hold.

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Stock Market Today: Stocks Close Out Worst April in Years With Another Slide

karee.venema@futurenet.com (Karee Venema) — Fri, 29 Apr 2022 20:30:44 +0000

U.S. stocks finished both the day and the month on a down note as a fresh round of earnings forecasts from companies only added to investors' laundry list of concerns.

Last night, Amazon.com (AMZN, -14.1%) said first-quarter revenue rose 7% on a year-over-year basis – the slowest pace in 20 years – to $116.4 billion, just shy of the consensus estimate. AMZN also offered lower-than-expected Q2 revenue guidance due to forex headwinds and the company's plan to move this year's Prime Day to July from June.

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Apple (AAPL) was another post-earnings decliner, sliding 3.7%. The tech giant reported a 9% annual rise in revenue to $97.3 billion – the most ever for a March quarter – but warned supply-chain issues caused by COVID-related lockdowns in China could create a $4 billion to $8 billion drag on sales in the current quarter.

"The guidance from multiple companies on the supply-chain situation and expenses going up seems to be weighing down the market after the brief recovery days," says Jimmy Lee, CEO of independent wealth management firm The Wealth Consulting Group. "So, I'm fairly happy with how the consumer seems to be holding up so far [adjusted for inflation, consumer spending rose 0.2% month-over-month in March, according to this morning's Commerce Department report], but Q2 will be more telling and sets up stocks to continue the volatility that we've seen so far this year."

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That volatility was on full display today, with the Nasdaq Composite sinking 4.2% to 12,334, the S&P 500 Index spiraling 3.6% to 4,131 and the Dow Jones Industrial Average surrendering 2.8% to 32,977.

For all of April, the Nasdaq shed 13.3% – marking its biggest monthly decline since October 2008 – the S&P 500 fell 8.8% and Dow gave back 4.9% for their worst months since March 2020.

(Image credit: YCharts)

Other news in the stock market today:

The small-cap Russell 2000 slumped 2.8% to 1,864.
U.S. crude oil futures slipped 0.6% to end at $104.69 per barrel.
Gold futures gained 1.1% to finish at $1,911.70 an ounce.
Bitcoin fell 4% to $38,351.14. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Tesla (TSLA) closed down 0.8% amid headlines that CEO Elon Musk sold roughly $8.4 billion in TSLA shares this week, according to the Securities and Exchange Commission (SEC). The reports follow Monday's headlines that Musk will buy Twitter (TWTR) for $44 billion. Yesterday, the billionaire tweeted that he is not planning to sell any additional shares. TSLA stock finished the week down more than 12%, but CFRA Research analyst Garrett Nelson said this "weakness presents an attractive entry point in one of the market's most compelling growth stories." He reiterated a Strong Buy recommendation on the shares, adding that "pressure from large stock sales by Musk have created opportunity for investors to buy shares at a discount in the past."
Intel (INTC) was the worst Dow Jones stock today, shedding 6.90% after earnings. In its fiscal second quarter, the semiconductor firm reported a 7%year-over-year decline in revenue to $18.35 billion – slightly more than analysts were expecting – while gross margin narrowed to 50.4% from 55.2%. INTC also offered weaker-than-anticipated current-quarter guidance, citing inventory and inflation challenges. Oppenheimer analyst Rick Schafer maintained a Perform (Neutral) rating on Intel, saying the bar is raised for the second half. "The company is in prove-it mode as management pushes capacity expansion and return to process leadership," Schafer writes in a note to clients. "We remain sidelined for now."

Sell in May and Go Away? Not So Fast.

What can investors expect going forward? Next week brings the start of a new month – as well as renewed focus on the old "Sell in May and Go Away" adage, familiar to many because of the tendency for stock returns to historically underperform in the six months between May and October. Here at Kiplinger, we believe investors are better off just sticking around.

That certainly doesn't mean that we think stocks have the all-clear to head higher in May. There are numerous worries – inflation and rate hikes, for example – that will likely continue to impact markets.

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What's more, "down Aprils tend to be followed by down Mays," says Chris Larkin, managing director of trading at E*TRADE. "And on top of that, May's average return is even worse when the S&P 500 is red for the year heading into the month."

Instead of fretting, investors should focus on their core portfolio, which can easily be built with some solid, low-cost funds such as those that make up our Kiplinger 25 – our favorite actively managed no-load mutual funds – or our Kiplinger ETF 20, the best cheap exchange-traded funds you can buy. And for those who want to mix some tactical positions into their portfolio, consider these stocks with strong profit margins. These well-managed firms have the potential to do well across different economic environments and have reasonable valuations to boot.

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Karee Venema was long AAPL as of this writing.

Pricey Gas Derails This Uber Driver

emma.patch@futurenet.com (Emma Patch) — Thu, 28 Apr 2022 19:38:48 +0000

Who: Vitalii Konstantinov, age 38

What: Uber driver

Where: San Diego

How long have you been driving for Uber? I moved here about eight years ago from eastern Russia—Irkutsk, almost by Mongolia. I started working for Uber in September 2017. I have a law and computer science degree in my country, but it’s really hard to find a job here because the legal industry is completely different. So right now, I am trying to update my computer science qualifications, but it’s not easy; it’s going to take time.

Have riders been treating you any differently since the invasion of Ukraine. I look Asian, so nobody assumes I am from Russia. When I tell them I am from Russia, they are usually surprised but do not show any negative emotion. There has been some Asian hatred, though, since the pandemic started because COVID is from Asia. Sometimes I feel those negative connotations in conversations.

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How much were you earning before the spike in gas prices? In a month, I would make about $4,000. In the summertime, peak time, I was making about $5,000 a month. This is a gross income; net income was smaller, excluding gas, car financing, insurance, maintenance, etc.

How much are you paying for gas? I’m paying $6 a gallon. Now, every day if I’m going to work for Uber, I have to put in at least $60. So in a week, if I work six days, it’s going to be $360 a week. It’s crazy. And for the month it’s going to be about $1,400.

Does Uber help cover the cost of gas? No. But when gas prices first started to go up, they decided to give an extra 60 cents for each ride, but it’s really not helping at all. It’s like a bad joke. They are just charging the passenger an extra 60 cents per ride and giving it to us.

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Do you have a family to support? I have two kids here and two kids in Russia. My two kids in Russia are from my previous wife—they are 13 and 11—and here my children are 4½ and 3. One is going to preschool, and one is going to pre-K.

Are you considered an independent contractor or an employee. The California labor commission, the law and the courts as of 2018 actually consider us employees. Last year, the high court struck down Proposition 22 [which made many gig economy workers in the state independent contractors]. That law is really bad for drivers because it means a lot of benefits and expenses would not have to be paid by Uber. I have no health insurance or retirement account. Uber and Lyft want to keep drivers independent, and they put hundreds of millions of dollars into promoting this law. Recently they appealed the court’s decision. Right now, it’s in Superior Court in California—the last tier of this battle. The decision will come this summer or the beginning of next year, I think.

How are you adapting? Since high prices hit, it’s gotten much worse working for Uber. You have to calculate all the mileage, the time you’re picking up, the locations, whether it will be busy or not. It’s really hard to work like that. So I’ve taken a second job preparing new electric vehicles from the factory. We adjust the new cars and drive them to the Tesla dealership or warehouse so that the engineers can set up the vehicles for the customers. It’s going to be temporary work—for maybe a month or two. After that, I don’t know. I’ll need to be looking for a new job

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3 Social Stocks Standing Out in a Narrowed Field

kiplinger@futurenet.com (Will Ashworth) — Tue, 26 Apr 2022 18:23:47 +0000

Social media stocks are in the limelight following news that one of their own will soon be taken private.

Specifically, Twitter (TWTR) put out a press release late in the day on April 25 confirming that its board of directors had agreed to Elon Musk's offer to buy the social media platform and take it private for $44 billion, or $54.20 a share.

The agreed-upon price is a 38% premium to Twitter's closing share price on April 1, 2022, the day before the Tesla (TSLA) CEO announced a 9.1% stake in the company.

By purchasing Twitter and taking it private, Musk has narrowed the list of social stocks for investors to choose from.

Here, we take a closer look at three top-rated social media stocks to watch post-Twitter. Each name featured here sports a consensus Buy recommendation from analysts and has solid growth prospects for the remainder of 2022.

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Data is as of April 25. Analysts' ratings courtesy of S&P Global Market Intelligence. Stocks are listed by analysts' consensus recommendation, from highest score (worst) to lowest (best).

Market value: $13.2 billion
Analysts' consensus recommendation: 2.44 (Buy)

According to S&P Global Market Intelligence, Pinterest (PINS, $20.00) has a whopping 22 Hold ratings and one Sell recommendation. This compares to 11 analysts who rate it a Strong Buy or Buy. So while the social media stock's consensus rating is a Buy, it's only by the thinnest of margins.

Still, PINS currently trades at a reasonable 5.3 times sales. And while the online product and idea discovery company is considered more of a long shot over the next 12 months, Pinterest is not deterred.

The company continues to grow its user base by entering into partnerships with some of e-commerce's biggest platforms. For example, on April 13, it announced a partnership with WooCommerce – an open-source e-commerce platform with more than 3 million sellers – connecting its merchants with Pinterest's more than 400 million monthly active users (MAUs).

"WooCommerce merchants can create or connect a Pinterest for Business account and automatically sync their product catalog, turning their products into browsable product Pins," the company stated in its press release. "By installing the Pinterest tag, users can measure conversions on their Pinterest ads and optimize these ads for shopping campaigns or retargeting."

According to Pinterest, when its users make purchases, they usually spend 2x more than buyers on other platforms. That's a number that should keep merchants engaged with the company's shopping tools.

One of the 22 analysts giving PINS a Hold rating is Argus Research's John Staszak. The analyst points to decline in monthly active users in both the third and fourth quarters of 2021 and concerns over the company's weaker revenue guidance. Still, Staszak's long-term rating is a Buy due to Pinterest's strong brand recognition in the U.S. and internationally.

Staszak has an earnings estimate of $1.34 a share for 2022 and $1.62 per share in 2023, though both are improvements over the $1.13 per share PINS reported in 2021. While it's cheap from an earnings perspective, PINS is the lowest-rated of the social stocks featured here.

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Market value: $507.6 billion
Analysts' consensus recommendation: 1.72 (Buy)

From a value perspective, it's hard not to like Meta Platforms (FB, $186.99). The parent company of Facebook trades at just 4.5 times sales, almost half Twitter's valuation, and its operating income in 2021 was a healthy $46.8 billion. Comparatively, Twitter's operating income in fiscal 2021 was just $270 million.

Elon Musk will have to perform miracles for Twitter's operating income to get anywhere near Meta Platforms.

UBS Global Research published a research report for the U.S. internet industry on April 20. It was quite positive about FB's business in the second half of 2022.

"We are increasingly upbeat on the second-half bull case on Meta shares, and while Street estimates look high to us, we think this is largely priced into shares already and the risk/reward skew looks positive," UBS analysts – who have a Buy rating on FB – wrote in the report.

Susquehanna Financial Group analyst Shyam Patil is also bullish on FB, rating the social stock at Positive, which is the equivalent of Buy. Patil also has a $217.31 price target, representing implied upside of 16.2% from current levels.

Over at Credit Suisse, analyst Stephen Ju lowered his FB target price on April 21 by 19%, from $336 to $272, though that still provides for significant upside over the next 12 months.

Ju maintained an Outperform (Buy) rating on FB stock due to "potential for better than-expected ad revenue growth on product innovation (Facebook Shops, Search in Marketplaces, etc.)."

The analyst also points to conservative Street models that "underestimate the long-term monetization potential of other billion-user properties like Messenger and WhatsApp," as well as the ability for "faster free-cash-flow growth on greater efficiency on content screening/security costs."

Despite FB shares being hit with broad-market headwinds in 2022, most analysts agree that it is one of the best social media stocks out there. Of the 54 following the stock that are tracked by S&P Global Market Intelligence, 32 have it at Strong Buy, eight say Buy, 12 call it a Hold and just two rate it at Sell or Strong Sell.

All in all, Meta Platforms is one of the strongest Buys among social stocks. The company generates so much cash it's hard to ignore.

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Market value: $48.8 billion
Analysts' consensus recommendation: 1.59 (Buy)

Snap (SNAP, $29.91) reported its Q1 2022 results on April 21. It lost 22 cents per share in the quarter, which was 5 cents worse than analysts expected. However, revenues were in-line with the consensus at $1.06 billion, while the company's daily active users (DAUs) came in at 332 million, up 18% year-over-year.

Despite SNAP stock falling on the news, CEO Evan Spiegel feels the solid growth in DAUs reflects the company's momentum – even with the operational challenges faced by social media stocks so far 2022. In the second quarter, it expects to grow sales by at least 20% over Q2 2021.

Analysts, meanwhile, are targeting 24% year-over-year revenue growth for Snap in the second quarter. This reflects Wall Street's bullish bias toward the social stock. Of the 41 analysts covering SNAP tracked by S&P Global Market Intelligence, 25 have it as a Strong Buy, eight as a Buy and eight say it's a Hold. There are no Sell recommendations at the moment.

"Snap in our view has been able to adapt to changes in Apple's ad-tracking policy; rivals such as Meta Platforms have struggled with those changes," says Argus Research analyst Jim Kelleher (Buy). Kelleher adds that while the process of addressing these issues is ongoing, "underlying fundamentals at the selfie company appear to be strengthening, not weakening."

BofA Securities analyst Justin Post (Buy) admitted it was a "tougher environment" in Q1 and that Snap and other social media stocks could see "future disruptions. Still, SNAP "is well positioned to accelerate in the second half of 2022," the analyst adds.

Post specifically points to solid two-year revenue trends, strong user growth and multiple product catalysts that could boost average revenue per user (ARPU) metrics as reasons he likes Snap, as well as the social stocks valuation. Snap is currently trading at 10.7 times sales.

So it is also a Buy, but perhaps for more aggressive investors.

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