Financials

By Avi Salzman The bond market is in charge right now — and that’s bad news for stocks. The major stock indexes fell sharply on Friday after the monthly jobs report came in hotter than expected and sent bond yields soaring. Investors fear that the Federal Reserve will keep interest rates high — or even raise them — to stave off inflation. The yield on the 30-year Treasury note briefly rose above 5%, its highest level since November 2023. The Dow Jones Industrial Average fell 697 points, or 1.6%, on Friday to finish the week off 1.9%. The S&P 500 index also closed down 1.9% for the week, while the Nasdaq Composite fell 2.3%. The move wiped out all of the market’s 2025 gains, and then some. Predictions are turning ominous. “Today’s unemployment report likely sounds the death knell for this easing cycle from the Fed,” wrote Peter Graf, chief […]

By Randall W. Forsyth Just a few stocks drive all the returns of the equity market while the vast majority matter little. Indeed, most of them just detract from gains produced by the leaders. This isn’t about the Magnificent Seven behemoth tech stocks, which have accounted for the lion’s share of equity returns over the past two years. A study of U.S. stocks’ returns over nearly a century finds that the median stock actually lost money since 1926 — even while a dollar invested across all stocks on average grew to $229.40 by the end of 2023. Of course, the concentration of outsize returns in just a few stocks is nothing new and, in fact, appears to be the norm over the modern history of equity markets that began in the first Roaring ’20s of the last century. All this comes from recent research by Arizona State University finance professor

By Lawrence C. Strauss An important question for the market in 2025 is whether strong performance will broaden beyond the Magnificent Seven and other large-cap growth names that have dominated in recent years. But when it comes to dividends, this year is shaping up as one with healthy mid-single-digit growth across much of the market. “From a macro perspective, the main driver of dividends historically is earnings growth,” says Ben Snider, senior strategist on the U.S. portfolio strategy macro team at Goldman Sachs. “Earnings growth was good last year, and we think it’ll be even better in 2025.” Goldman is forecasting an 11% bump in S&P 500 earnings per share this year, compared with an estimated 8% in 2024. That, in turn, will lead to a 7% boost in dividends this year versus 6% in 2024, Goldman expects. Ohsung Kwon, a U.S. equity strategist at BofA Securities, has a more