Bridgewater Associates’ Post

Time to rethink the U.S. market dominance narrative. The U.S. is way too dependent on funding its growth through debt—like they say, nothing lasts forever. There’s no way that the current stock market growth is in any way sustainable. Crisis happens when nobody expects it. Emerging tech hubs like Bangalore and Berlin, combined with fierce regulatory pressures on U.S. giants, are setting the stage for a global shake-up. Add the explosive digital growth in Asia and Africa, and you've got a recipe for a power shift. U.S. markets? They're facing saturation and stiff competition. Watch out for emerging markets sprinting ahead with innovation and sustainability. The era of global innovators is upon us. #InvestmentTrends #GlobalMarkets #TechDisruption #EmergingMarkets #InnovationOverload https://lnkd.in/dBaK4NYG

In our 2024 Fall Outlook, we see signs of deeper market momentum. The S&P 500 rose by 5.9%, with growth extending beyond tech to include cyclical and interest-sensitive sectors, supported by the Fed’s recent rate cuts. With EPS growth accelerating and AI investment bolstering productivity across industries, we anticipate these trends continuing into 2025. As always, our strategy centers on quality, prioritizing companies with strong earnings fundamentals. Read the full Market Outlook for more insights: https://lnkd.in/ekUs-fyx

New Post: Big Tech earnings ‘crucial’ to markets this week - Investors wondering where the S&P 500 is headed, at least for the next month or so, will want to pay attention to three key days this week. Between Tuesday and Thursday, five Big Tech companies with a combined market value of more than $10 trillion will report earnings: Microsoft Corp., Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. and Apple Inc. Meanwhile, the Federal Reserve will issue its decision on interest rates, followed by Chair Jerome Powell’s press conference where he’s expected to discuss the outlook ahead. The stakes couldn’t be much higher, with the S&P 500 Index pushing deeper into record territory on bets that central bankers are poised to began easing monetary policies and tech behemoths like Microsoft getting more valuable by the day. “Tech disproportionately moved the market last year and big tech continues to have the biggest earnings power, so the results will be crucial for the markets,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. After a shaky start to the year, the S&P 500 is rising again and on pace for a third monthly advance that’s added more than 18% since late October, when the index hit a near-term low before Fed officials started signaling that rate hikes were over.  The rally is again being led by megacaps including Microsoft, Alphabet, Amazon.com, Nvidia and Meta Platforms, which were responsible for a majority of the index’s 24% gain last year as investors became captivated by the possibilities of artificial intelligence services. The so-called Magnificent Seven, which also includes Tesla Inc., just hit a record 29% of the S&P 500 despite a slump in shares of the electric-vehicle maker that’s erased more than $200 billion in market value just this month. AI Booming Microsoft and Alphabet will kick off earnings on Tuesday after markets close. The two companies are among the best positioned to benefit from the AI boom after investing heavily in the field for years. Microsoft has been adding the features to its suite of software products, and investors are betting that AI will soon start boosting profit and sales growth. On Wednesday, the focus shifts to the end of the Fed’s January meeting, where it’s expected to hold interest rates steady for a fourth-consecutive meeting. Traders will be primarily focused on what Powell and other policymakers have to say about the timing of easing. Recent data showing inflation continuing to recede and resilient US economic growth suggest central bankers won’t be in a hurry to cut interest rates. Apple is the biggest draw on Thursday, when Amazon and Facebook-owner Meta Platforms also report in the afternoon. The iPhone maker has been dogged by concerns about revenue growth and is expected to report its first sales expansion in four quarters. Read more: Apple veteran instrumental to iPhone developmen

📈 A focus on companies with strong cashflow generation and the ability to grow dividends above inflation can be beneficial, especially when the inflation outlook is uncertain and interest rates could be higher for longer. Read more in “Casting a wider net” 🎣 https://bit.ly/44oSmF7 #income #investing #equities

For much of the post-COVID period, equity markets have been largely driven by strong returns from massive companies collectively dubbed ‘The Magnificent Seven,’ thanks to their excellent performance. However, since Nvidia’s recent annual results came in below some market expectations, this sector has struggled. Due to its scale and importance to the US market, this has brought down other indices, causing the S&P 500 and NASDAQ to struggle. Peter McLoughlin, Head of Research at Rowan Dartington, notes that September has historically not been a favourable month for the tech sector. He also points out that, beneath the headline Index figures, we’re witnessing a gradual shift in market leadership, with financial, industrial and real estate investment trusts (often called REITs) performing better. Peter suggests: “The outperformance of equal-weighted indices compared to their market cap-weighted counterparts is a trend gaining momentum and deserves close attention. Simultaneously, the Russell 2000 is posting robust advances. These undercurrents suggest tectonic shifts in market leadership are underway, a development that aligns with the concerns about market concentration effects.” https://lnkd.in/eeXqb4jz

In the below I discuss the contrast between investment opportunities in US/global equities versus the Australian market.

“Domestic equity markets continue to rally, with the S&P 500 returning 3.22% in March. The U.S. economy remains resilient and has led to positive performance in nearly every S&P 500 sector. Mega-cap tech companies, however, still lead the broader market.” For more news on the markets, read our March market commentary: https://lnkd.in/gDRU_QNp #innovest #investments #markettrends #economy #financialmarkets

New Post: Five Market Issues to Watch This Week and Investment Strategies (TrendHub KR – Posts by ICARUS Journalist) This week's financial markets are centered around the economic calendar and corporate earnings announcements. These events are crucial as they provide investors with valuable insights into the current direction of monetary policy, the economic situation, and market movements. The key areas of focus include: Federal Reserve Meeting Minutes Release The release of the minutes from the Federal Reserve's meeting in January is a notable event this week. It emphasized that policymakers decided to keep borrowing costs at their current level, indicating that more time is needed to ensure inflation is on a sustainable path back to the Fed's 2% target. Investment Strategies Following the Federal Reserve Meeting Minutes Release Prepare for Short-Term Interest Rate Volatility: The recent Fed minutes suggest a low likelihood of interest rate cuts in the short term. This means investors should prepare for short-term interest rate volatility. Reevaluating investments in short-term bonds or bonds with variable rates and strategically allocating liquid assets in the portfolio can be useful. Consider Inflation-Protected Assets: With the Fed indicating more time is needed to return to the inflation target, investing in inflation-protected bonds (TIPS) or real assets like gold could help protect asset values in inflationary conditions. Reevaluate Approach to Growth and Tech Stocks: The low likelihood of rate cuts could negatively impact growth and tech stocks, making these sectors potentially less attractive. Reevaluating exposure and considering a diversification strategy within the portfolio is advisable. Focus on Value and Dividend Stocks: Value and dividend stocks can offer stable returns during economic uncertainties, and dividends provide an additional income opportunity for investors. Monitor Economic Indicators and Additional Fed Comments: For timely adjustments to investment strategies, closely monitoring US employment conditions, consumer spending, inflation, and additional comments from Fed officials is crucial. These strategies can help investors navigate market volatility and capitalize on opportunities based on the latest Federal Reserve meeting minutes. NVIDIA's Earnings Announcement NVIDIA, at the heart of financial investment in AI technology, has its earnings announcement play a pivotal role in determining whether the significant uptrend in its stock price in 2023 will continue. It is expected to have a decisive impact on market sentiment. Investment Strategies Around NVIDIA's Earnings Announcement Prepare for Volatility Around the Earnings Release: NVIDIA's earnings announcement could significantly impact market sentiment and stock price. Adjusting position sizing or using short-term hedging strategies during anticipated periods of high volatility, such as options for portfolio p

Transformative change, both #top-line growth and cost reduction),can ill boost value for those capable of executing, and it will likely be needed more than ever. Cost adjusted models ready for growth with #addons help. #privateequity https://ow.ly/PoBJ50Qv72H

In this week's financial landscape, U.S. markets have shown mixed performance amid investor responses to recent economic data and corporate earnings releases. Major Mergers & Acquisitions: Several notable M&A movements unfolded. Tapestry’s attempted acquisition of Capri Holdings, owner of Michael Kors, was blocked due to antitrust concerns, halting an $8.5 billion merger intended to consolidate luxury brands. Meanwhile, Carlyle abandoned its bid for Thyssenkrupp’s defense unit over regulatory indecision from the German government, showcasing the challenges private equity faces in the defense sector. In the energy space, Eni S.p.A. announced plans to sell a 25% stake in its biofuel division to KKR, a strategic pivot towards renewable investments. Indices Movements: On the index front, U.S. equity markets showed varied results. The Dow Jones Industrial Average fell 2.7%, while the S&P 500 declined by 1%. However, the NASDAQ outperformed slightly with a modest gain of 0.2%, led by tech stocks. International markets also trended downward, with Japan experiencing the largest drop, down 4% amid economic uncertainty. Emerging markets generally declined, with India and Korea posting notable weekly losses of 3.7% and 2.3%, respectively. Sector and Stock Analysis: Within the S&P 500, energy and financials sectors faced declines due to pressures from rising bond yields, while communication services and consumer discretionary sectors posted modest gains. Tesla's recent earnings report led to a significant rise in its stock, boosting sentiment in tech and signaling resilience among large-cap tech companies ahead of further earnings announcements. Meanwhile, small-cap stocks underperformed, and U.S. Treasury yields surged to multi-month highs as markets increasingly price out expected rate cuts by the Federal Reserve, pushing short-dated yields higher and impacting the bond market. Looking ahead, key economic data including U.S. PCE inflation and jobs reports are expected to influence market expectations for Federal Reserve policy, potentially reinforcing or challenging the recent shifts in investor sentiment. This backdrop highlights a cautious but opportunity-focused outlook, especially in sectors resilient to inflation and interest rate volatility. #KG_Consulting