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Welcome back. Amrith Ramkumar with you setting up trading for the week ahead.
Stock futures are slightly lower, with major indexes still hovering near record levels. Investors are looking ahead to a first look at first-quarter GDP scheduled for Friday.
U.S. crude-oil prices are surging on reports that the State Department is expected to announce the end of waivers for countries to import Iranian oil.
It's a packed week on the earnings calendar,
with Whirlpool on deck after the market closes today and tech behemoths
Microsoft, Facebook and Amazon slated for later in the week. Results
from industrial stalwarts United Technologies, Boeing and Caterpillar
are also on tap.
Plus, our Michael Wursthorn explains why some investors expect the market's favorite internet stocks to keep rising after earnings.
Markets in a Minute
The Shanghai Composite slumped Monday, while European markets were
closed for Easter Monday ahead of a packed week of earnings.
Low Interest Rates Push Investors Back to FANG
Highflying tech stocks are back in favor as major indexes near records.
Wall Street’s FANG gang is growing again.
Big money managers and other investors are again buying shares of
Facebook, Amazon.com, Netflix, Google parent Alphabet and shares of
other fast-growing companies, as the prospects of interest rates
remaining low and a still-expanding U.S. economy have pushed investors back into one of the bull market's most profitable trades.
The so-called FANG companies, as well as Apple and Microsoft,
have gained $872.5 billion in market value so far this year, nearly
recouping the $945 billion in losses those stocks suffered in a
punishing fourth-quarter selloff. Their increase has contributed heavily to the S&P 500’s 14% gain since January.
Unlike last year, when the quick rise of technology and other growth stocks spooked investors, several say conditions are ripe for these companies to run higher.
They have still-attractive valuations, and the expectations are
that many of those companies will continue to outgrow the broader
“The climate couldn’t be any more different from last year,” said Denny
Fish, a portfolio manager who co-manages Janus Henderson’s global
technology fund. He is bullish on Netflix and maintains significant
positions in Microsoft, Alphabet, Amazon and others.
“Investors are now thinking through a more positive outcome, whether
it’s China or the Fed,” Mr. Fish added, referring to investors’
expectations of a trade deal between the U.S. and China and the Fed’s
more cautious stance.
That has more fund managers crowding into those stocks.
More than 180 fund managers overseeing $547 billion in assets
said they considered the FANG stocks, as well as Baidu, Alibaba and
Tencent, the second-most crowded trade in the market, behind
shorting European equities, according to Bank of America Merrill Lynch’s
April fund-manager survey, its highest ranking since the bank’s
Although fund managers usually view overcrowding in tech as a drawback, a factor that was frequently cited in 2018 as a major risk to the stock market, some say this year's trade is less congested, leaving more room for further upside.
Active fund managers, for example, had higher allocations to FANG
stocks last month, compared with the fourth quarter, but allocations
remained below levels seen over the last two years, Bank of America
added in a separate report.
The WSJ Dollar Index surged
to its highest level since early March on Thursday following upbeat
retail sales data, pulling within 0.1% of its early year peak. The
dollar is still up more than 7.5% in the past year after edging lower
Friday, threatening corporate profits for large multinational companies.
The Stoxx Europe 600 climbed for the seventh consecutive session on
Thursday, hitting a fresh eight-month high. The index is up 16% for the
year and 5.7% below its April 2015 record. European markets were also
closed Friday for Good Friday and are closed again today for Easter
On this day in 1970, the Dow dropped 1.3% to 762.61, and H. Ross Perot
suffered the worst one-day personal investment loss then on record. His
Electronic Data Systems dropped from roughly $150 a share to around $80
in chaotic over-the-counter trading, a paper loss of $450 million for
The Chicago Fed National Activity Index for March will be released at 8:30 a.m. ET.
Existing-home sales for March are slated for 10 a.m. and expected to rise at an annual pace of 5.3 million compared to 5.51 million a month earlier.
Traders work in the VIX pit on the floor of the Cboe Global Markets building in Chicago. PHOTO: DANIEL ACKER/BLOOMBERG NEWS
Why the Uber and Lyft IPOs may lead to higher fares. The
ride-hailing services' initial public offerings stand to enrich early
investors. But for customers of these services, the IPOs might eventually cost them money as going public brings pressure to generate profits.
How retirees should invest. The key to investing at a time of low interest rates is to create a portfolio that gives a dependable source of cash flow, whatever happens to the economy.
The myth of the "dumb money" is dying. A study of Vanguard clients shows individual investors to be patient and prudent.
It also offers a hint as to how investors and their financial advisers
can get a little smarter still, investing columnist Jason Zweig writes.
What We've Heard on the Street
“For Pinterest and Zoom Video, braving the public waters may be less an act of audacity than an act of necessity.”
PayPal Holdings: Executives at PayPal’s digital payments company Venmo have been meeting with banks since late last year to discuss issuing a Venmo-branded credit card,
The Wall Street Journal reported. The firm is close to selecting
Synchrony Financial as its credit-card issuer and is hoping to announce
the card this year.
McDonald’s: The fast-food chain is taking “signature crafted” hamburgers off its menu, after the sandwiches slowed operations at the chain’s restaurants.
Key Energy Services: Goldman Sachs Group has acquired a 7.5% stake in the Houston-based company.
Pinterest: Shares of the online image-search company surged in their market debut Thursday, rising 28% to $24.40 from an initial-public-offering price of $19.