2 hours ago
Want to ease the downturn in your portfolio? UBS says move from cash to bonds
UBS's Mark Hefele said aggressive investors will want to switch away from cash-heavy positions now and invest in bonds before the Federal Reserve starts cutting interest rates. .
Yields on the 100 largest money market funds are still well above 5%, but as the Fed lowers interest rates, those rates will fall. Mr. Hefele, global chief investment officer of wealth management, said UBS expects high-quality medium-duration bonds to return 8.5% in its base case, compared with a return of 4.3% for cash.
Another reason to choose long-term bonds is that in hard landing situations, bonds cushion portfolio losses. In a recession scenario, the stock market could fall by more than 15% on a total return basis, but UBS expects losses would be contained by a 16% rise in bonds.
A portfolio with a 60% allocation to stocks and 40% to bonds would see a decline of only 3% in this situation, according to Höfele.
“Investors holding excess cash will not have sufficient protection in this scenario. Cash 'will not appreciate and returns relative to interest rates are likely to decline in this scenario,'” he wrote.
–Darla Mercado
2 hours ago
Transportation stocks are ready for bidding, according to MRB Partners
The slump in freight traffic is expected to recover in 2024, and transportation stocks are expected to recover as well, as inventory shortages spur a recovery in manufacturing production, according to a note from MRB Partners on Thursday. It is said that Increased global trade will also boost stock prices, the researchers said.
Within the industry, MRB recommends air carriers and logistics companies, saying, “The recent rise in air cargo revenue ton-miles bodes well for air cargo stocks' relative future returns, and their stock prices are attractive.” It has said.
Meanwhile, rail and truck drivers are being held back by “sluggish growth in non-intermodal rail transport, a trend toward subdued prices, and rising relative valuations,” wrote MRB strategist Salvatore Ruscitti.
The Dow Jones Transportation Average is up 2.3% so far this week and 0.34% year-to-date, exactly in line with the S&P 500 this week, but behind the S&P's 2.6% gain in 2024.
— Scott Schnipper, Michael Bloom
2 hours ago
Intel, AMD, Nvidia drop Nasdaq 100 futures
Share prices of major semiconductor stocks pushed down the Nasdaq 100 futures market on Thursday night. The index fell 0.5%, or about 90 points in after-hours trading.
Semiconductor maker Intel reported disappointing first-quarter forecasts, sending shares down about 10%.
Shares of another semiconductor company, Advanced Micro Devices Inc., fell more than 3%, and that of Applied Materials Inc., which provides software and manufacturing equipment, fell 2.3%. Semiconductor company KLA also fell 6% after reporting weaker-than-expected third-quarter results, and Nvidia fell 1.7% as the sector fell.
— Peer Singh
2 hours ago
Intel and Levi Strauss among companies entering after-hours trading
Let's check out the companies that are becoming a hot topic for after-hours trading.
- T-Mobile — Telecommunications stocks fell 2.9%% after T-Mobile missed fourth-quarter earnings estimates but beat revenue estimates. The company's earnings per share were $1.67, compared to analyst estimates compiled by LSEG of $1.90 per share. Sales for the period were $20.48 billion, exceeding expectations of $19.64 billion, according to LSEG.
- Intel — Intel's stock fell nearly 8% in after-hours trading after the company released disappointing first-quarter guidance. Intel expects adjusted earnings of 13 cents per share in the first quarter of 2024, while analysts surveyed by LSEG expected 33 cents per share. The expected sales of $12.2 billion to $13.2 billion were also lower than analysts' expectations for sales of $14.15 billion for the same period.
- Levi Strauss — Levi Strauss shares fell nearly 1% after the apparel company announced Thursday it would cut at least 10% of the company's workforce worldwide through restructuring efforts. The company said the job cuts are expected to take place in the first half of 2024. Fourth-quarter results were also announced on Thursday, and Levi's adjusted earnings per share exceeded expectations, but sales fell short of expectations.
Read here for the complete list.
— Peer Singh
3 hours ago
Stock futures open in the red
Futures tracking the Dow Jones Industrial Average fell 67 points, or 0.18%, on Thursday.
S&P 500 futures fell about 0.15%. Nasdaq 100 futures fell 0.4%, led by Intel's decline after disappointing first-quarter guidance.
— Peer Singh
