![]() ![]() On the one hand, you have credible companies infusing generative AI into their businesses to unlock efficiencies and win new business. Not doing so could prove very painful to one's portfolio. It's time for investors to draw a differentiation in AI stocks. "So as we're now adding this back in to balance sheets that are already pretty strained by two years of very high inflation that's run significantly higher than wage growth, the capacity to absorb this in a lot of budgets I think is much worse now," Simons said on Yahoo Finance Live. Jefferies economist Thomas Simons thinks at least $400 a month in spending capacity will be removed from the pockets of those with student loans. Goldman Sachs estimates student loan repayments will subtract 0.2 percentage points from personal consumption expenditures growth this year if the loan forgiveness plan is struck down, or 0.1 percentage point if the plan stands. Make no mistake, the payment restart will be a headwind for an economy that doesn't need one. Are more retailer ratings cut? Do strategists trim their S&P 500 earnings estimates and year-end price targets? How will markets react? The market reaction to the Target downgrade was modest, but can it continue? The downgrade to Target's stock could be a canary-in-the-coal-mine indicator of what analysts and market strategists do this summer before the repayments begin. The economic impact of student loan repayments Unclear if there is a near-term catalyst to jumpstart Target's stock considering all of this, which comes after another tough quarter of sales. The company also caught a JP Morgan downgrade on concerns the restart of student loan payments in Sept. The fear is consumer backlash means weakening sales and a missed second quarter. Shares have been hammered by close to 14% in the past two weeks since the company removed LGBTQ+ merchandise from its stores. The order is totally random and not in order of importance. Here is a tiny sampling of things I am watching during a summer that probably won't involve me going to a beach, pool, or house party because well - investing "stuff" is all I got going for me. I would argue there are many more compelling stories for investors compared to Summer 2022. Not just because we have bills to pay here, but because there is a litany of interesting stories to track in the markets. While the natural inclination is to "sell in May and go away," I humbly say: please don't do that. And for most market goers, that means watching the action on the Yahoo Finance app (which I strongly encourage you to download) from a beach, a park, or a pool. The official start of summer is only a few weeks away. This is The Takeaway from today's Morning Brief, which you can sign up to receive in your inbox every Monday to Friday by 6:30 a.m. ![]()
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