|Day's range||3,201.43 - 3,231.82|
|52-week range||2,191.86 - 3,393.52|
Stocks extended gains Monday morning after two pharmaceutical companies received “fast track” designation for the development of their vaccine candidates against Covid-19, stoking hopes of near-term inoculation amid the pandemic.
(Bloomberg) -- U.S. equities touched a five-week high on expectations earnings will offer an optimistic outlook for the world’s biggest economy amid a raging coronavirus pandemic. Oil erased an earlier loss.The S&P 500 was back to being basically even this year, led by the consumer discretionary, health care and materials sectors. Traders are awaiting reports this week from a slew of companies that have yet to provide concrete guidance on the impact of the virus. Shares of PepsiCo Inc. rose after the snack-maker reported stronger-than-expected second-quarter sales. Maxim Integrated Products Inc. surged after rival Analog Devices Inc. agreed to acquire the semiconductor firm. Tesla Inc. jumped as much as 16%.European stocks rose with government bond yields. Oil was little changed ahead of an OPEC+ meeting at which the group may announce plans to start tapering historic production cuts.With global stocks trading near their highest since February, focus now turns to whether the profit outlook will back up bullishness fueled by central bank and fiscal policy support. Traders have largely shrugged off new coronavirus outbreaks in some parts of the world, with Florida on Sunday posting the biggest one-day rise in cases since the pandemic began in the U.S., reporting 15,300 new infections.“The backdrop is positive for all sectors of the market,” said Gerry Sparrow, president of Sparrow Capital Management Inc. “The reason for that backdrop is that the recovery has taken hold, so jobs data, consumer credit, home building strength signaled that the economy has shifted in a positive direction.”There’s reason for optimism even though earnings are estimated to have contracted by more than 40% in the worst quarter since the financial crisis, as analysts upgrade their forecasts for the rest of the year.Here are some key events coming up:JPMorgan, Bank of America, Wells Fargo, Goldman Sachs, BNY Mellon and Citigroup start the U.S. earnings season for banks.Wednesday brings the Bank of Japan’s policy decision and a Governor Haruhiko Kuroda briefing.The EIA crude oil inventory report is due Wednesday.China releases second-quarter GDP on Thursday as well as key economic indicators for June.The European Central Bank meets to set monetary policy on Thursday, with President Christine Lagarde holding a virtual press conference afterward.These are the main moves in markets:For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Let's see if Apollo Global (APO) stock is a good choice for value-oriented investors right now from multiple angles.
Let's see if Ameriprise Financial (AMP) stock is a good choice for value-oriented investors right now from multiple angles.
(Bloomberg) -- The near $1 trillion chunk of exchange-traded funds known as smart beta has got a problem: Some of the most popular don’t seem that smart.More than $14 billion this year has flooded into five of these quant strategies, which are wrapped up in an ETF in a bid to blend active and passive investing. Yet about $5 billion of this went to funds that barely deviate from the stock market, according to Bloomberg Intelligence. The smart-beta products with the purest exposures to systematic factors actually lost cash.The implications of this multi-year trend could be major for an industry that’s swelled to a fifth of America’s $4.4 trillion ETF market. Legions of investors may not be getting the diversification they’re paying for, while those who are sour on the smartest funds as key strategies misfire.It highlights the headwinds providers face as they struggle to convince investors to ditch cap-weighted benchmarks and adopt next-generation products.“The flows basically show investors are hesitant to take on large concentrated bets,” said Athanasios Psarofagis, an analyst at Bloomberg Intelligence. “It’s a balance between picking a product that’s more true to the craft versus what’s easier to fit into a portfolio.”Born from the work of Nobel laureates and pitched by the biggest firms on Wall Street, smart-beta funds are an attempt to capture potential excess returns by following academically proven quantitative strategies.Where index ETFs weight companies by their market capitalization, a smart-beta version would typically select and weight constituents based on factors such as profit growth or relative cheapness.Yet most watered-down funds -- those behaving most like the stock market overall and with a portfolio least representative of their factor -- have lured $40 billion over the past three years, according to Bloomberg Intelligence. Their most-pure peers, which tend to be more volatile but offer larger factor exposures, netted just $7 billion.One reason: It’s becoming ever-more painful for advisers and allocators to deviate from major benchmarks.For instance, a few mega-cap tech companies increasingly dominate the S&P 500, helping the latter beat value and small-cap indexes by at least 50 percentage points over the past decade. The trend intensified this year as fears over the economic impact from the coronavirus spurred investors to take refuge in large growth stocks.“Investors want a different experience than a cap-weighted approach, but they also don’t want to deviate too much from the market,” said Todd Rosenbluth, CFRA Research’s head of ETF and mutual fund research. “From an adviser’s perspective, it’s a lot harder to explain why something that’s intended to be a better investment experience than a cheap, market-weighted product underperforms so much.”Of course, even the purest ETFs can’t exactly mimic the academic portfolios that inspired them. The original models envisaged by Nobel Laureate Eugene Fama and Kenneth French are meant to have both long and short positions, but that’s pricey and more complex to implement, so smart-beta ETFs usually take a long-only approach.Either way, several major factors have struggled in 2020, according to market-neutral Bloomberg indexes. Value is down almost 8%, while momentum shares and dividend payers are barely changed.For factor advocates, underperformance is par for the course. The strategies are intended to work over very long time horizons, and lengthy periods lagging the market should be expected, though even the most loyal quants are voicing concern at the protracted bout of pain for factors such as value.That’s partly why purer factor ETFs have struggled to lure more money -- deviation from benchmarks has generally not been rewarded since the last crisis.Double EdgedMeanwhile, methodology can have a major impact on performance even when two strategies track the same investing style. The average one-year performance gap between the best- and worst-performing value ETFs is 16 percentage points, says Psarofagis at Bloomberg Intelligence.For example, the $48 billion Vanguard Value ETF (VTV) uses five measures to identify about 330 cheap large-cap stocks. The $101 million Alpha Architect U.S. Quantitative Value ETF (QVAL) includes mid caps and only holds about 40-50 shares selected by a proprietary multiple.The latter naturally looks very different from any equity benchmark, and has also dropped twice as much as VTV over the past year.The way Alpha Architect founder Wes Gray sees it: His firm’s funds are like a concentrated detergent that investors can dilute however they want. They might deviate more from the benchmark, but that’s necessary if investors want to capture factor premiums.“If you believe in academic research, if you think it makes sense, we’re going to be the way you capture it in its purest form possible,” he said. “That’s a double-edged sword obviously.”Some watering down may be inevitable -- or even desirable from clients’ perspective.“Advisors and institutions are oftentimes tied to how much tracking error they can take,” said Psarofagis. “So they naturally have to gravitate to the watered-down products that are easier to slip into a core allocation.”Still, the degree to which long-only funds are acting like the broader market is striking. The 10 largest smart-beta ETFs all have a one-year correlation with the S&P 500 of at least 0.97, with 1 denoting perfect synchronicity.The phenomenon is not limited to the exchange-traded market. An academic paper published last month studied smart beta across both ETFs and mutual funds and concluded that about a third of products are essentially market-index funds, and even argued that their names are misleading.To a practitioner, that might sound harsh.Many would argue academic research can’t be directly translated into products, and even Fama-French models have come under fire in recent years amid persistent underperformance. And with the pandemic whiplashing systematic trades, diversification is harder to find. Evercore ISI analysis last week showed macro forces were driving 78% of the moves in the S&P 500.Ultimately then, investors would be wise to make sure they’re not paying a premium for products that in practice can act like a cap-weighted index tracker.“The extra fees investors are paying for these funds should justify the extra factor exposures they’re getting,” said Vitali Kalesnik, head of equity research at Research Affiliates LLC, a smart-beta pioneer.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
PNC Financial's (PNC) cost-control efforts and benefits from strong equity markets are likely to have been offset by lower interest rates in the second quarter.
(Bloomberg) -- Tesla Inc.’s relentless surge continued Monday amid several upcoming events that include the possible unveiling of new battery technology from the electric vehicle maker, entry into a lucrative new market and the potential inclusion of the stock into the prestigious S&P 500 Index.The company late on Friday said its much-anticipated “Battery Day” event will be held on Sept. 22, at its Fremont, Calif., factory. According to Wedbush analyst Daniel Ives, Tesla could announce a number of new potential “game changing” battery developments at the event. Separately, Roth Capital upgraded the stock, saying the company is well down the path of preparing to enter the Indian market, where they see China-like potential.“The technology innovations around Fremont remain the key ingredients in Tesla’s success on the battery front and we believe the company is getting closer to announcing the million-mile battery,” Ives wrote in a note to clients.Tesla jumped as much as 16% to $1,794.99 on Monday, the biggest intraday gain since March 24.Roth analyst Craig Irwin upgraded his rating on Tesla to the equivalent of a hold from sell, saying the company is well down the path of preparing to enter the Indian market, where the analyst sees China-like potential. “We expect tangible evidence by the end of 2020, with sales in India starting as soon as 2021,” the analyst added.The incredible rally in the stock has left Wall Street analysts struggling to make sense of the sky-high valuation -- which soared past that of Toyota Motor earlier this month and topped $300 billion on Monday. Tesla shares are up about four-fold just this year, despite a steep pandemic-related selloff in February and March.Although the stock had kicked off this year with a strong run, its ascent has been turbo-charged after Tesla reported better-than-expected delivery numbers for the second quarter earlier this month, leading many to say the company may be poised to report a profit for the period. Profitability is good news in itself, but in the case of Tesla, this would also mark the fourth consecutive quarter of profit, a milestone it needs to achieve to be considered for inclusion in the S&P 500 Index.(Updates with analyst comments starting in the third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Entasis Therapeutics (ETTX) saw a big move last session, as its shares jumped more than 5% on the day, amid huge volumes.
The Zacks Analyst Blog Highlights: Harmony Gold Mining, Galiano Gold, Alamos Gold, AngloGold Ashanti and Sandstorm Gold
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Benchmarks ended higher on Friday as investors cheered positive results from Gilead's coronavirus vaccine candidate, remdesivir's clinical trial data, overlooking spike in new cases.
As of late, it has definitely been a great time to be an investor of PLDT
CoreLogic (CLGX) is seeing positive earnings estimate revisions, suggesting that it could be a solid choice for investors.
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As of late, it has definitely been a great time to be an investor of Smith & Wesson Brands
Considering growth prospects of the chip makers, it makes sense to invest for long-term gains despite second wave fears. Here, we have shortlisted four stocks that are alluring investment options.
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As of late, it has definitely been a great time to be an investor in Novavax, Inc. (NVAX).
As of late, it has definitely been a great time to be an investor in Avis Budget Group, Inc. (CAR).
As of late, it has definitely been a great time to be an investor in Virtus Investment Partners, Inc. (VRTS).