This chart shows how ‘depressing’ life has been for stock pickers

While savvy stock picking used to make money managers billions of dollars, the likelihood of beating passive investors these days is slimming. Investors have a 22% chance of picking a stock that will perform better than the S&P 500, according to Societe Generale. In a universe of 16,000 global and emerging market stocks, 78% have underperformed the S&P 500 in the past two years. Further, only 34% have performed better than the S&P 500 in the last year, said Societe Generale in a note titled “the


While savvy stock picking used to make money managers billions of dollars, the likelihood of beating passive investors these days is slimming.
Investors have a 22% chance of picking a stock that will perform better than the S&P 500, according to Societe Generale.
In a universe of 16,000 global and emerging market stocks, 78% have underperformed the S&P 500 in the past two years.
Further, only 34% have performed better than the S&P 500 in the last year, said Societe Generale in a note titled “the
This chart shows how ‘depressing’ life has been for stock pickers Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, passive, lapthorne, life, pickers, depressing, stock, investing, 500, investors, global, money, shows, chart, active


This chart shows how 'depressing' life has been for stock pickers

It certainly doesn’t pay to be an old-fashioned stock picker anymore.

While savvy stock picking used to make money managers billions of dollars, the likelihood of beating passive investors these days is slimming. Investors have a 22% chance of picking a stock that will perform better than the S&P 500, according to Societe Generale.

In a universe of 16,000 global and emerging market stocks, 78% have underperformed the S&P 500 in the past two years. Further, only 34% have performed better than the S&P 500 in the last year, said Societe Generale in a note titled “the most depressing chart ever!”

“The strong performance of the S&P 500 leaves everything in its wake,” Andrew Lapthorne, Global Head of Quantitative Research at the firm said in a note to clients. “This is lauded as a success and an abject failure of active fund management.”

With data like this, it’s no surprise that assets in passive investing topped those of active investing for the first time ever in August. U.S. index funds and ETFs assets reached $4.271 trillion, compared with $4.246 trillion run by stock-pickers, according to Morningstar. This shift has been coming for decades as passive investing consistently outperforms active over long time periods despite active management charging higher fees.

In the last five years, 82% of active funds in the United States underperformed the S&P 500, according to S&P Dow Jones Indices’ most recent global SPIVA report. And with over 12,400 stocks failing to beat the S&P 500 in the past two years its no wonder why stock-picking shops are closing their doors.

Billionaire investor Jeffrey Vinik closed his hedge fund this year less than a year after its relaunch, citing a challenging environment to raise money. Veteran money manager Louis Bacon plans to close his New York-based hedge fund Moore Capital Management and return capital to investors, the Financial Times reported last month.

This trend is also dissuading private companies from entering the public markets, Lapthorne noted.

“If the measurement of company success is outperforming the 500 largest-cap US businesses supported by the US Federal Reserve, debt-funded share buybacks, and increasingly sophisticated financial products, then you can understand why less business are going public and private equity is booming,” said Lapthorne.

— with reporting from CNBC’s Michael Bloom.


Company: cnbc, Activity: cnbc, Date: 2019-12-06  Authors: maggie fitzgerald
Keywords: news, cnbc, companies, passive, lapthorne, life, pickers, depressing, stock, investing, 500, investors, global, money, shows, chart, active


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Goldman Sachs has a simple ‘laggard’ stocks strategy for early 2020 that tends to beat the market

Buy 2019’s laggards as they will likely be 2020’s early leaders, Goldman Sachs said. The strategy to pick up battered stocks in the beginning of a given year has a good track record of beating the market, according to Goldman. In 2019, this laggard trade outperformed the S&P 500 by 3.7 percentage points, Goldman said. Under Armour, Etsy, Twilio, Westlake Chemical and GoDaddy are among the names on that list. Petrochemical manufacturing company Westlake Chemical and web hosting company GoDaddy bo


Buy 2019’s laggards as they will likely be 2020’s early leaders, Goldman Sachs said.
The strategy to pick up battered stocks in the beginning of a given year has a good track record of beating the market, according to Goldman.
In 2019, this laggard trade outperformed the S&P 500 by 3.7 percentage points, Goldman said.
Under Armour, Etsy, Twilio, Westlake Chemical and GoDaddy are among the names on that list.
Petrochemical manufacturing company Westlake Chemical and web hosting company GoDaddy bo
Goldman Sachs has a simple ‘laggard’ stocks strategy for early 2020 that tends to beat the market Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: yun li
Keywords: news, cnbc, companies, strategy, beat, market, 500, westlake, stocks, 2019, trade, tends, armour, sachs, simple, chemical, goldman, laggard, laggards, early, performance


Goldman Sachs has a simple 'laggard' stocks strategy for early 2020 that tends to beat the market

Traders work on the floor at the New York Stock Exchange, October 25, 2019.

Buy 2019’s laggards as they will likely be 2020’s early leaders, Goldman Sachs said.

The strategy to pick up battered stocks in the beginning of a given year has a good track record of beating the market, according to Goldman. The prior year’s bottom-third stocks have outperformed the S&P 500 in the first quarter for 11 times out of the past 17 years with an average 1.4% extra return on the benchmark, the bank said. In 2019, this laggard trade outperformed the S&P 500 by 3.7 percentage points, Goldman said.

Among the bottom third of the S&P 500 in terms of 2019 performance, the bank recommended buying the laggards that its analysts have out-of-consensus buy ratings and above-consensus estimates.

Westlake Chemical, L Brands, Terex, Yelp, Cree and Under Armour are some of the “buy-rated laggards” of 2019 where the majority of the Street has neutral or sell ratings but Goldman analysts recommend buying.

Goldman also likes laggards where the bank’s price targets are at least 5% above consensus in 2020. Under Armour, Etsy, Twilio, Westlake Chemical and GoDaddy are among the names on that list.

Under Armour is up only 5% on the year and Etsy fell 11% in 2019, both significantly lagging the S&P 500’s 24% gain. Petrochemical manufacturing company Westlake Chemical and web hosting company GoDaddy both are up about 1% this year.

To be sure, this year’s record-setting rally created a different set-up for this strategy as even the laggards are up year to date. So Goldman is advising clients against blindly piling into all of them.

“2019 has seen the strongest YTD absolute performance for laggards in over 5 years,” Alex Meintel, Goldman’s analyst said in a note to clients on Monday. “It underscores the importance of a selective approach to playing this year’s group of laggards.”

Stocks rebounded from a three-day slide on Wednesday and on track for another up day on Thursday on renewed trade optimism. The S&P 500 is on pace for its best annual performance since 2013.

“While the relative performance of laggards is in line with history, absolute performance is actually positive so far this year (+1% and +6% average and median, respectively), something that has happened just two other times since 2002,” said Meintel.

Energy and Discretionary laggards are down the most this year, underperforming the market by 32% and 30%, respectively, the analyst said.


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: yun li
Keywords: news, cnbc, companies, strategy, beat, market, 500, westlake, stocks, 2019, trade, tends, armour, sachs, simple, chemical, goldman, laggard, laggards, early, performance


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Chart suggests a year-end market rally will emerge as soon as next week

The market could be on the verge of a year-end rally. Hickey builds his bullish case in a chart that shows the intramonth performance of the S&P 500. Stocks typically don’t break out into a sustainable year-end rally until around Dec. 14, according to Hickey’s data. But the S&P 500 is still down 1 percent, and the Dow is off almost 1.5%. Hickey points out the S&P 500 has already soared almost 25% this year surrounded by trade jitters.


The market could be on the verge of a year-end rally.
Hickey builds his bullish case in a chart that shows the intramonth performance of the S&P 500.
Stocks typically don’t break out into a sustainable year-end rally until around Dec. 14, according to Hickey’s data.
But the S&P 500 is still down 1 percent, and the Dow is off almost 1.5%.
Hickey points out the S&P 500 has already soared almost 25% this year surrounded by trade jitters.
Chart suggests a year-end market rally will emerge as soon as next week Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: stephanie landsman
Keywords: news, cnbc, companies, 500, month, market, soon, chart, suggests, trend, shows, hickey, stage, yearend, stocks, rally, emerge, week


Chart suggests a year-end market rally will emerge as soon as next week

The market could be on the verge of a year-end rally.

According to Bespoke Investment Group’s Paul Hickey, stocks generally stage their final push for the year in mid-December — even when the month starts off weak, as this one did.

“You would think you’d see strong performance throughout the month,” the firm’s co-founder told CNBC’s “Trading Nation” on Wednesday. “What we found is almost more so than any other month, December is a very back-end-loaded month, meaning the returns usually come towards the back half of the month.”

Hickey builds his bullish case in a chart that shows the intramonth performance of the S&P 500. He compares the current bull market to the overall trend between 1983 to 2018.

Since 1983, his chart shows December’s first two weeks often see muted returns. Stocks typically don’t break out into a sustainable year-end rally until around Dec. 14, according to Hickey’s data. That’s around the end of next week.

Even with last December’s plunge skewing the data, Hickey notes the historical trend is intact. So he’s confident the odds are in favor of a positive December despite the month’s choppy start.

“The market was extremely overbought heading into the month,” he said. “It was a healthy pullback. We didn’t see any major technical damage in the charts.”

The major indexes gained more than a half percent Wednesday and were pointing to higher opens on Thursday. But the S&P 500 is still down 1 percent, and the Dow is off almost 1.5%.

Hickey is confident stocks will rediscover upward momentum that will last into 2020.

He isn’t concerned climbing geopolitical risks, including the looming U.S. tariffs against China scheduled for Dec. 15, will disrupt the seasonal trend. Hickey points out the S&P 500 has already soared almost 25% this year surrounded by trade jitters.

Hickey cites a growing U.S. economy and a Federal Reserve keeping interest rates steady for his bullish outlook.

“These two positive things should set the stage for the market having a decent return,” Hickey said.

Disclaimer


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: stephanie landsman
Keywords: news, cnbc, companies, 500, month, market, soon, chart, suggests, trend, shows, hickey, stage, yearend, stocks, rally, emerge, week


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A top Tesla analyst raised his ‘bull case’ for the stock to $500, or 50% higher from here

Workers walk outside the Tesla Inc. Gigafactory in Shanghai, China, on Friday, Nov. 1, 2019. Morgan Stanley increased its “bull case” for Tesla to $500 a share on Thursday, in the firm’s calculation of a best case scenario for the company’s value if Cybertruck is successful and the new factory in China exceeds expectations. Tesla’s stock rose 0.7% in after hours trading from its close of $330.37 a share. Morgan Stanley’s new bull case represents a 50% increase from Tesla’s current stock price. B


Workers walk outside the Tesla Inc. Gigafactory in Shanghai, China, on Friday, Nov. 1, 2019.
Morgan Stanley increased its “bull case” for Tesla to $500 a share on Thursday, in the firm’s calculation of a best case scenario for the company’s value if Cybertruck is successful and the new factory in China exceeds expectations.
Tesla’s stock rose 0.7% in after hours trading from its close of $330.37 a share.
Morgan Stanley’s new bull case represents a 50% increase from Tesla’s current stock price.
B
A top Tesla analyst raised his ‘bull case’ for the stock to $500, or 50% higher from here Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: michael sheetz
Keywords: news, cnbc, companies, case, raised, bull, higher, 500, china, share, tesla, analyst, price, teslas, jonas, stanleys, stock, morgan


A top Tesla analyst raised his 'bull case' for the stock to $500, or 50% higher from here

Workers walk outside the Tesla Inc. Gigafactory in Shanghai, China, on Friday, Nov. 1, 2019.

Morgan Stanley increased its “bull case” for Tesla to $500 a share on Thursday, in the firm’s calculation of a best case scenario for the company’s value if Cybertruck is successful and the new factory in China exceeds expectations.

“In an optimistic scenario,” Morgan Stanley analyst Adam Jonas said he sees Tesla selling 100,000 Cybertrucks by the end of 2024, at an average price of $50,000. Additionally, Jonas believes Tesla’s Gigafactory in China could perform better than anticipated and reach a production rate of 450,000 units per year by 2024/2025.

Tesla’s stock rose 0.7% in after hours trading from its close of $330.37 a share. Morgan Stanley’s new bull case represents a 50% increase from Tesla’s current stock price. Jonas is widely followed on Wall Street as he was one of the earliest bullish analysts on Tesla, as well as the market for electric vehicles.

But Morgan Stanley’s “base case” price target of $250 a share remains unchanged, as well as its equalweight rating on Tesla.


Company: cnbc, Activity: cnbc, Date: 2019-12-05  Authors: michael sheetz
Keywords: news, cnbc, companies, case, raised, bull, higher, 500, china, share, tesla, analyst, price, teslas, jonas, stanleys, stock, morgan


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In 2019, almost every investment worked

The S&P 500 is up more than 25% and counting. Treasurys, which tend to fall when risk assets rally, also gained in 2019. For stock investors specifically, it was hard to guess wrong. A look at the S&P 500 companies’ internal performance shows only 64 names, or 12%, are down this year. All 11 S&P 500 sectors are ending the year with positive returns.


The S&P 500 is up more than 25% and counting.
Treasurys, which tend to fall when risk assets rally, also gained in 2019.
For stock investors specifically, it was hard to guess wrong.
A look at the S&P 500 companies’ internal performance shows only 64 names, or 12%, are down this year.
All 11 S&P 500 sectors are ending the year with positive returns.
In 2019, almost every investment worked Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: yun li
Keywords: news, cnbc, companies, sectors, investment, 500, rates, investors, 2019, stock, sheet, markets, corporate, worked, returns


In 2019, almost every investment worked

Traders work on the floor of the New York Stock Exchange Lucas Jackson | Reuters

This year is shaping up to be one of the best ever for investors of all stripes with nearly every single asset class on track to finish 2019 in the green. From stocks to government debt to corporate bonds to commodities, no matter where you went, you reaped a profit this year. The S&P 500 is up more than 25% and counting. Treasurys, which tend to fall when risk assets rally, also gained in 2019. Oil, gold and corporate bonds all scored double-digit returns. For stock investors specifically, it was hard to guess wrong. A look at the S&P 500 companies’ internal performance shows only 64 names, or 12%, are down this year. All 11 S&P 500 sectors are ending the year with positive returns. Tech is the biggest winner this year with a 41.5% gain. Communication services, industrials, financials, real estate, consumer sectors all skyrocketed more than 20% this year.

‘Buy everything’

It might seem a little too good to be true as the markets have been grappling with a handful of risks that are almost unprecedented — a costly trade war with China and a bid to impeach the president. But thanks to the Federal Reserve for coming to the rescue. The central bank pulled a 180, cutting rates three straight times this year. The Fed has also been pumping billions into the financial system after the mid-September tumult in very short-term lending markets. “We’ve gotten three rate cuts as we know and a dramatic rise in the size of their balance sheet in a very short period of time,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. The markets “see an expansion of the Fed’s balance sheet to the extent it’s grown and the only response is, it’s QE. Buy everything.” The stimulus has lowered interest rates, pushing all assets up at the same time.

Will the markets hold up?


Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: yun li
Keywords: news, cnbc, companies, sectors, investment, 500, rates, investors, 2019, stock, sheet, markets, corporate, worked, returns


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Morgan Stanley says get defensive with stocks like Coca-Cola because of ‘late cycle’ economy

Trade tensions and the 2020 presidential election will add even more uncertainty to the aging U.S. economic recovery, making surefire defensive stocks and consumer staples more attractive investments, according to Morgan Stanley. “Trade, the election, and a late cycle economy keep the market searching for new leadership amid high uncertainty,” Wilson wrote. “We slightly favor the more defensive outcome given our well below consensus forecast for S&P 500 earnings growth next year.” Wilson also re


Trade tensions and the 2020 presidential election will add even more uncertainty to the aging U.S. economic recovery, making surefire defensive stocks and consumer staples more attractive investments, according to Morgan Stanley.
“Trade, the election, and a late cycle economy keep the market searching for new leadership amid high uncertainty,” Wilson wrote.
“We slightly favor the more defensive outcome given our well below consensus forecast for S&P 500 earnings growth next year.”
Wilson also re
Morgan Stanley says get defensive with stocks like Coca-Cola because of ‘late cycle’ economy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: thomas franck
Keywords: news, cnbc, companies, stocks, cocacola, growth, 500, economy, wilson, market, defensive, target, election, morgan, late, 2020, cycle, stanley, wrote


Morgan Stanley says get defensive with stocks like Coca-Cola because of 'late cycle' economy

A customer shops as bottles of Coca-Cola Co. brand soda sit on display for sale.

Trade tensions and the 2020 presidential election will add even more uncertainty to the aging U.S. economic recovery, making surefire defensive stocks and consumer staples more attractive investments, according to Morgan Stanley.

Chief U.S. equity strategist Michael Wilson told clients in a note Monday that expectations of “disappointing” S&P earnings next year should allow companies like Coca-Cola, Lowe’s and McDonald’s to outperform the broader market.

“Trade, the election, and a late cycle economy keep the market searching for new leadership amid high uncertainty,” Wilson wrote.

“We expect the market to vacillate between a pro-cyclical outcome and a defensive one as data comes in and trade tensions and the election evolve,” he added. “We slightly favor the more defensive outcome given our well below consensus forecast for S&P 500 earnings growth next year.”

The investment bank sees GDP growth in the U.S. stabilizing below trend under 2% for the next year and labor costs accelerating, both of which are set to pose headwinds in the new year.

Wilson also reiterated his 2020 S&P 500 target of 3,000, which implies that the major market index will fall 4.5% over the next 13 months. The projection makes Morgan Stanley one of the two most-bearish brokerages tracked by CNBC: The median S&P 500 strategist target for year-end 2020 is 3,325, 5.9% above Friday’s close.

UBS is the only other firm with a target as low as 3,000.

Wilson said his lackluster forecast for U.S. equities comes despite easier monetary policy and hopes that trade relations between Washington and Beijing are improving.

In fact, Wilson wrote that central bank liquidity and positive seasonal data could boost the S&P 500 to overshoot the upper end of his 2020 bull case. But by April, he wrote, the liquidity tailwind should fade and the market will refocus on company fundamentals.

“Uncertainty means rotations should continue and their durability will depend on whether growth is accelerating or decelerating,” Wilson wrote. “With the S&P 500 currently above the upper end of the channel due primarily to excessive central bank balance sheet expansion, we think risk reward skews lower, and would prefer to be more opportunistic when adding risk.”


Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: thomas franck
Keywords: news, cnbc, companies, stocks, cocacola, growth, 500, economy, wilson, market, defensive, target, election, morgan, late, 2020, cycle, stanley, wrote


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Cramer: I’m not worried about a December stock market drop like last year

CNBC’s Jim Cramer said Monday he doesn’t think the stock market will drop in December as it did last year. “Nothing worries me in the sense of looking for a big sell-off in December,” Cramer said on “Squawk on the Street.” But 2018 saw the S&P 500 drop more than 9% in the final month. The S&P 500 closed at a record high on Wednesday. The S&P 500, as of Friday’s slightly lower close, was up more than 25% this year.


CNBC’s Jim Cramer said Monday he doesn’t think the stock market will drop in December as it did last year.
“Nothing worries me in the sense of looking for a big sell-off in December,” Cramer said on “Squawk on the Street.”
But 2018 saw the S&P 500 drop more than 9% in the final month.
The S&P 500 closed at a record high on Wednesday.
The S&P 500, as of Friday’s slightly lower close, was up more than 25% this year.
Cramer: I’m not worried about a December stock market drop like last year Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, looking, cramer, trade, index, market, 500, month, stock, sales, drop, worried, tariffs


Cramer: I'm not worried about a December stock market drop like last year

CNBC’s Jim Cramer said Monday he doesn’t think the stock market will drop in December as it did last year.

“Nothing worries me in the sense of looking for a big sell-off in December,” Cramer said on “Squawk on the Street.”

“I’m seeing ‘green shoots’ in Europe from auto sales,” the “Mad Money” host said, referring to signs of economic recovery in a downturn. European car sales rose 8.6% in October to their highest level since 2009. However, global car sales are expected to see their steepest year-over-year decline since the 2008 financial crisis.

December has historically been the strongest trading month of the year. But 2018 saw the S&P 500 drop more than 9% in the final month. The market, after months of selling, bottomed on Christmas Eve before staging a 2019 rally that could give stocks their best yearly gains in a generation. The S&P 500 closed at a record high on Wednesday.

The S&P 500, as of Friday’s slightly lower close, was up more than 25% this year. Early Monday, the index was on a modest two-session losing streak due to some disappointing economic data and trade concerns.

Manufacturing activity declined in November in the ISM Manufacturing index released Monday. Also Monday, President Donald Trump said he’s restoring tariffs on metal imports from Brazil and Argentina, and Chinese state media reported that Beijing wants Washington to cancel tariffs in order to reach a “phase one” trade deal.

However, Cramer expects this year to end on a stronger note. “I’m looking for more reasons for it to go higher.”


Company: cnbc, Activity: cnbc, Date: 2019-12-02  Authors: jessica bursztynsky
Keywords: news, cnbc, companies, looking, cramer, trade, index, market, 500, month, stock, sales, drop, worried, tariffs


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Germany’s E.ON announces £500 million restructuring for UK’s Npower

The logo on the outside of eon headquarters being cleaned. German energy group E.ON on Friday announced a restructuring plan for its struggling British division, which includes Npower in a move it said would incur costs of 500 million pounds ($642 million). We’ve emphasized repeatedly that we’ll take all necessary action to return our business there to consistent profitability,” E.ON CEO Johannes Teyssen said in a statement. E.ON said Npower’s residential and small and medium-size enterprise cus


The logo on the outside of eon headquarters being cleaned.
German energy group E.ON on Friday announced a restructuring plan for its struggling British division, which includes Npower in a move it said would incur costs of 500 million pounds ($642 million).
We’ve emphasized repeatedly that we’ll take all necessary action to return our business there to consistent profitability,” E.ON CEO Johannes Teyssen said in a statement.
E.ON said Npower’s residential and small and medium-size enterprise cus
Germany’s E.ON announces £500 million restructuring for UK’s Npower Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-29
Keywords: news, cnbc, companies, germanys, eon, announces, pounds, parts, million, struggling, plan, npowers, british, restructuring, uks, business, npower, 500


Germany's E.ON announces £500 million restructuring for UK's Npower

The logo on the outside of eon headquarters being cleaned.

German energy group E.ON on Friday announced a restructuring plan for its struggling British division, which includes Npower in a move it said would incur costs of 500 million pounds ($642 million).

The plan includes closing parts of Npower and additional job cuts at the unit, one of Britain’s ‘Big Six’ energy providers, which has been hurt by struggling competition and internal billing problems.

“The U.K. market is currently particularly challenging. We’ve emphasized repeatedly that we’ll take all necessary action to return our business there to consistent profitability,” E.ON CEO Johannes Teyssen said in a statement.

He said talks with British unions about the plans – which include a carve-out of Npower’s industrial and commercial customers – had already started, not giving a number for potential job losses.

E.ON said Npower’s residential and small and medium-size enterprise customers would migrate to E.ON’s local business, while the remaining parts of Npower would be restructured or shut down.

E.ON said it expects its combined British business to achieve at least 100 million pounds of earnings before interest and tax and positive free cash flow after smart meter investments from 2022 onwards.


Company: cnbc, Activity: cnbc, Date: 2019-11-29
Keywords: news, cnbc, companies, germanys, eon, announces, pounds, parts, million, struggling, plan, npowers, british, restructuring, uks, business, npower, 500


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December could be a good month for the stock market, but there’s one big risk

The S&P 500 is up more than 25% for the year. Best month of year2019 has turned out to be a very good year for the market, with the Jan. 1 to Thanksgiving Day period the 14th best for the S&P 500 since 1928, according to Bespoke. The 25.5% gain in the S&P 500 was the best for the period since 2013, and now the market enters a typically strong period. “December is the best month of the year. The S&P 500 was up 3.4% to 3,140, and the Dow closed Friday at 28,051, up 3.7% for the month of November.


The S&P 500 is up more than 25% for the year.
Best month of year2019 has turned out to be a very good year for the market, with the Jan. 1 to Thanksgiving Day period the 14th best for the S&P 500 since 1928, according to Bespoke.
The 25.5% gain in the S&P 500 was the best for the period since 2013, and now the market enters a typically strong period.
“December is the best month of the year.
The S&P 500 was up 3.4% to 3,140, and the Dow closed Friday at 28,051, up 3.7% for the month of November.
December could be a good month for the stock market, but there’s one big risk Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-29  Authors: patti domm
Keywords: news, cnbc, companies, theres, think, market, best, data, average, stock, risk, month, report, big, 500, trade, good


December could be a good month for the stock market, but there's one big risk

The Charging Bull near Wall Street is pictured in New York. Carlo Allegri | Reuters

Stocks have had a bang-up year so far, and they’re heading straight into the month that is often the best of all. The S&P 500 is up more than 25% for the year. Thanksgiving week was technically positive for the market, with the small cap Russell 2000 breaking out, joining other indexes in an uptrend. Stocks, however, were lower Friday in sluggish trading after the Thanksgiving holiday. Through Wednesday, the Dow, Nasdaq and S&P 500 had all popped to new record highs, with consumer discretionary and tech names leading the market higher this past week. The Russell 2000 is not yet back to its highs, but it pushed above its previous 52-week high, in a healthy sign for the overall market. In the coming week, investor focus will move more intently to the topic of trade, and that is what will make or break the rally at year-end. President Donald Trump has promised that a preliminary trade deal with China is close, but there still is no agreement and the Dec.15 deadline for new tariffs is getting closer. Trump’s signing of legislation Wednesday supporting the Hong Kong protesters drew a negative reaction from Beijing and adds more uncertainty to trade talks. The health of the economy is also a factor for markets, and there is some key data, with the ISM manufacturing report on Monday followed by the government’s all-important monthly jobs data on Friday.

Best month of year

2019 has turned out to be a very good year for the market, with the Jan. 1 to Thanksgiving Day period the 14th best for the S&P 500 since 1928, according to Bespoke. The 25.5% gain in the S&P 500 was the best for the period since 2013, and now the market enters a typically strong period. “December is the best month of the year. The S&P is up 1.6 percent on average. It also has the highest frequency of advances, up 76% of the time,” said Sam Stovall, chief investment strategist at CFRA. December is also the least volatile month of all, but it could see some bumps. “The market tends to go through a mid-December low, which then represents a good buying opportunity, at least through the end of January,” Stovall said, adding he thinks the decline would be no more than 5%. “I don’t think we need a big pullback or a correction. A mid-single digit decline would be sufficient.” Stovall said 2019 was set up to win because of the way the year started, following the sharp sell-off last December. When the months of January and February are higher, the S&P 500 has an average total return of 24%, according to data going back to 1945. If the following year does not see have a similar double gain in January and February, it still does fairly well with a normal average return of 8% to 9%, he said. The market’s performance for the entire year also bodes well for a positive move into year-end, according to Bespoke. Since 1928, when stocks are up 20% or more by Thanksgiving, like this year, the S&P 500 usually ends the year even higher, with an average gain of 1.8% between Black Friday and New Year’s Eve, Bespoke noted.

S&P Sub-industry sector performance

Stovall also looked at sector performance for December, going back to 1995 and found that some of the worst performing S&P sub-industry sectors were retail oriented and are highly dependent on good holiday sales. On average, computer and electronics retailers were weakest, off 4.5%, followed by leisure products off 2.2% and department stores, off 0.9%. Specialty stores and apparel and luxury goods were also among the 10 poorest performers. While 87% of the sub-industry sectors were positive, the top performer was homebuilding, up 4.5 %, followed by home improvement retail. “You want to buy now what nobody wants to own,” said Stovall, noting the market is forward pricing so investors are looking ahead to building activity picking up in spring and summer when they dip into homebuilders. Companies that sell fertilizers also do well in December. Stocks on Friday closed out their best monthly performance since June. The S&P 500 was up 3.4% to 3,140, and the Dow closed Friday at 28,051, up 3.7% for the month of November. Technology was the best performing sector for the month, gaining 5.2%. That helped drive the Nasdaq up 4.5% for the month to 8,665. Biotech was also a top performer, helping lift the Russell 2000, which gained 4% in November to 1,624. The IBB iShares Nasdaq Biotechnology ETF was up 11% for the month.

Trade tensions

The big risk to the market in December is the outcome of trade talks, but economic reports will be important as investors continue to assess whether the Fed was right in ending its rate cuts. The economy has shown some signs of picking up, and a string of improved data has led economists to look for better growth in the fourth quarter. But the critical driver of growth continues to be the consumer, so holiday sales will be an important indicator to watch. Employment data remains the most important of the economic reports, since a strong labor market is crucial for consumer confidence and spending. Economists expect the economy added 183,000 jobs in November, according to Refinitiv. The economy added 128,000 jobs in October, even with the negative drag of 46,000 striking GM workers and the reduction of 17,000 federal government jobs, due to the end of temporary employment for Census workers. “For the employment report, we think one factor that is likely to result in a slightly stronger headline payroll number is the fact we will now count the GM workers that were on strike,” said Barclays economist Pooja Sriram. “We estimated 36,000 to 40,000 were left out of the report in October. We think they’re to be counted as part of the November report. Much of that is going to be seen in private payrolls and especially in manufacturing payrolls.”

In October, ISM manufacturing activity improved, and even though it remained in contraction, some economists said the slowdown may be showing signs of bottoming. The ISM index is expected to be at 49.4, still shy of 50, which shows expansion, but better than October’s 48.3. “We still think it’s going to be a sub-50 print,” said Sriram. October’s durable goods report showed a surprise gain in business investment when economists had expected to see contraction. Sriram said the speed of decline in manufacturing has certainly slowed, and she is watching the data closely. “I don’t think we’re comfortable saying we bottomed,” she said. OPEC and Russia hold meetings in Vienna on Thursday and Friday, and analysts expect them to extend their production cutting agreement. However, Russia may seek to change the rules for how it counts its petroleum output, so the meeting may not be as predictable as expected, some analysts say.

Week ahead calendar


Company: cnbc, Activity: cnbc, Date: 2019-11-29  Authors: patti domm
Keywords: news, cnbc, companies, theres, think, market, best, data, average, stock, risk, month, report, big, 500, trade, good


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Here’s what happened to the stock market on Friday

Dow Jones Industrial Average falls 112 pointsThe Dow slipped 112.59 points, or 0.40% to close at 28,051.41. The S&P 500 pulled back 0.40% to 3,140.98. Big November gainsThe S&P 500 rose more than 3% for November, notching its biggest one-month gain since June when it rallied more than 6%. Optimism around U.S.-China trade relations and a milder-than-expected pullback in corporate earnings helped drive the market’s strong performance this month. China also threatened on Friday to take “strong coun


Dow Jones Industrial Average falls 112 pointsThe Dow slipped 112.59 points, or 0.40% to close at 28,051.41.
The S&P 500 pulled back 0.40% to 3,140.98.
Big November gainsThe S&P 500 rose more than 3% for November, notching its biggest one-month gain since June when it rallied more than 6%.
Optimism around U.S.-China trade relations and a milder-than-expected pullback in corporate earnings helped drive the market’s strong performance this month.
China also threatened on Friday to take “strong coun
Here’s what happened to the stock market on Friday Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-11-29  Authors: fred imbert
Keywords: news, cnbc, companies, fell, market, trading, heres, stock, strong, dow, uschina, happened, performance, usenergy, 500, 040


Here's what happened to the stock market on Friday

Dow Jones Industrial Average falls 112 points

The Dow slipped 112.59 points, or 0.40% to close at 28,051.41. The S&P 500 pulled back 0.40% to 3,140.98. The Nasdaq Composite fell 0.46% to end the day at 8,665.47. Stocks fell in a shortened trading session but still posted their best monthly performance since June.

Big November gains

The S&P 500 rose more than 3% for November, notching its biggest one-month gain since June when it rallied more than 6%. Optimism around U.S.-China trade relations and a milder-than-expected pullback in corporate earnings helped drive the market’s strong performance this month. However, the signing of two U.S. laws supporting Hong Kong protesters dampened some of that positive sentiment as a key Dec. 15 deadline approaches. China also threatened on Friday to take “strong counter-measures” against the U.S.

Energy shares take a big hit

What happens next?


Company: cnbc, Activity: cnbc, Date: 2019-11-29  Authors: fred imbert
Keywords: news, cnbc, companies, fell, market, trading, heres, stock, strong, dow, uschina, happened, performance, usenergy, 500, 040


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