Market Overview - U.S. stock markets are experiencing a successful year, with major indexes like the Dow, S&P 500, and Nasdaq Composite up 11.2%, 14.8%, and 18.8% respectively [2] - The technology sector, particularly driven by advancements in generative and agentic artificial intelligence (AI), is the primary force behind this rally, although the finance sector has also contributed with the Financial Select Sector SPDR (XLF) up 8.5% year to date [3] Recommended Stocks for 2026 - Five finance stocks are recommended for investment in 2026, having risen over 30% this year: Morgan Stanley (MS), Interactive Brokers Group Inc. (IBKR), Robinhood Markets Inc. (HOOD), Cboe Global Markets Inc. (CBOE), and Invesco Ltd. (IVZ) [4][9] - All five stocks currently hold a Zacks Rank 1 (Strong Buy), indicating potential for further upside [4] Morgan Stanley (MS) - Morgan Stanley's focus on wealth and asset management, along with strategic acquisitions like EquityZen, is expected to enhance revenue growth, with projected increases of 11.7% in total revenues and 12.8% in investment banking fees for 2025 [7] - The firm has an expected revenue growth rate of 3.9% and earnings growth rate of 5.8% for next year, with a recent 3.7% improvement in the Zacks Consensus Estimate for earnings [10] Interactive Brokers Group Inc. (IBKR) - IBKR's revenue growth is supported by proprietary software development, lower compensation expenses, and expansion into emerging markets, with an expected revenue growth rate of 5.5% and earnings growth rate of 8.1% for next year [11][13] - Recent results showed solid revenue growth and lower expenses, indicating a positive outlook for the company [12] Robinhood Markets Inc. (HOOD) - Robinhood operates a financial services platform that allows trading in various assets, including cryptocurrencies, and is expected to benefit from increased retail market participation [14][15] - The company has an expected revenue growth rate of 20.3% and earnings growth rate of 16.2% for next year, with a notable 9.7% improvement in the Zacks Consensus Estimate for earnings [16] Cboe Global Markets Inc. (CBOE) - CBOE anticipates growth in trading volume, which will drive transaction fees and organic growth, with an increased revenue growth target for 2025 set to low double digits to mid-teens [17][18] - The company has an expected revenue growth rate of 2.7% and earnings growth rate of 4.7% for next year, with a 3% improvement in the Zacks Consensus Estimate for earnings [19] Invesco Ltd. (IVZ) - Invesco's financial performance is bolstered by higher assets under management (AUM) and strategic expansion plans, with an expected revenue growth rate of 14.4% and earnings growth rate of 28.6% for next year [20][22] - Recent initiatives, including converting QQQ into an open-end ETF and establishing a joint venture in India, are expected to support revenue growth [21]

Core Insights - Cboe Global Markets has made significant progress in developing its Securities Financing Transactions (SFT) clearing service, with BNY acting as the first Agent Lender, targeting UCITS clients [1][2] - The new title transfer model with a pledge-back feature allows UCITS and other beneficial owner lenders to access centrally cleared SFTs without posting margin or contributing to the CCP's default fund, enhancing market liquidity and efficiency [1][2] - The collaboration aims to drive market innovation, transparency, and resilience, while also optimizing collateral efficiency and empowering UCITS participants [2] Group 1 - Cboe Clear Europe has launched a centrally cleared triparty model for UCITS-compliant clearing, transforming the traditional bilateral process for SFTs in European equities and ETFs [2] - The introduction of central clearing to SFTs offers substantial capital optimization opportunities, including reductions in Risk-Weighted Assets (RWA) for certain clearing participants [2] - Cboe Clear Europe plans to expand its SFT clearing service to cover other lendable securities and new jurisdictions within the next year [2][3] Group 2 - The integration of BNY as a Tri-Party Collateral Agent enhances collateral efficiency and liquidity through Cboe's Global Collateral Platform [2] - The scalable technology platform of Cboe Clear Europe is designed to empower participants and strengthen the securities lending market infrastructure [3] - Cboe Global Markets provides trading, clearing, and investment solutions across various asset classes, including equities, derivatives, and FX in multiple regions [4]

Core Insights - A compelling and diversified product portfolio is driving revenues for players in the Zacks Securities and Exchanges industry, with expected benefits from rising trading volumes, product expansion, and increased adoption of crypto assets [1] - The industry is experiencing a shift towards non-trading revenue sources, which enhances business dynamism and stability [4] - Mergers and acquisitions are accelerating as companies seek growth and innovation [5] - Continuous investment in technology, particularly AI and blockchain, is crucial for enhancing competitiveness and operational efficiency [6][7] Industry Overview - The Zacks Securities and Exchanges industry includes companies that operate electronic marketplaces for trading stocks, options, bonds, and commodities, generating revenue from fees and data services [2] - The industry is witnessing increased adoption of crypto assets, but faces challenges due to regulatory compliance [2] Trends Impacting the Industry - Volatility is driving trading volume, with a projected market size of $49.6 billion by 2028, growing at a CAGR of 12.1% [3] - Companies are diversifying into recurring revenue sources to reduce reliance on trading income, focusing on data services and technology platforms [4] - M&A activity is on the rise, with firms pursuing strategic deals to enhance competitiveness [5] Technology Investments - Industry players are increasing technology investments to improve market models and operational efficiency, leveraging AI and blockchain [6][7] Industry Performance - The Zacks Securities and Exchanges industry ranks 28, placing it in the top 11% of 244 Zacks industries, indicating positive near-term prospects [8] - The industry has underperformed compared to the broader Zacks Finance sector and the S&P 500, with a year-to-date gain of 5.4% versus 13.3% and 16.1% respectively [12] Valuation Metrics - The industry is currently trading at a trailing P/E of 23.57X, compared to the S&P 500's 23.2X and the sector's 17.5X [15] Company Highlights - Cboe Global Markets is positioned for growth with an expanding product line and recurring revenues [19] - S&P Global is well-positioned to benefit from the demand for business information services, with a focus on innovation through acquisitions [28] - Nasdaq is enhancing its non-trading revenue base and focusing on technology and analytics [26] - CME Group is the largest futures exchange, with growth driven by product expansion and global presence [31]

Core Insights - The U.S. is set to launch regulated leveraged spot cryptocurrency trading as the CFTC engages with major exchanges like CME Group, Cboe, and Nasdaq to introduce this new trading option [2][7] - The proposed framework aims to bring investor protections and federal oversight to the crypto market, potentially redirecting trillions in trading volume from offshore exchanges to U.S. platforms [4][7] - The recent end of the U.S. government shutdown has cleared the way for regulatory measures and approvals, including the CFTC's crypto framework, which could be implemented as soon as next month [5][6] Group 1 - The CFTC is in discussions with regulated exchanges to allow margin trading for Bitcoin and Ethereum under its supervision [2][3] - The new trading framework will operate under the Commodity Exchange Act, ensuring that leveraged transactions occur on designated markets [3] - Analysts predict that this move could significantly shift trading volume from unregulated offshore exchanges to U.S. markets [4][7] Group 2 - The conclusion of the government shutdown has enabled agencies like the SEC and CFTC to resume normal operations and advance pending measures [5][6] - The bipartisan agreement in Congress facilitates the progression of crypto rulemaking and ETF approvals that had been stalled [5] - The CFTC's crypto framework is anticipated to be finalized and potentially launched next month [6]

Core Viewpoint - The U.S. Commodity Futures Trading Commission (CFTC) is in discussions with licensed exchanges to launch leveraged cryptocurrency spot trading products, potentially available as soon as next month [1] Group 1 - The CFTC's acting chair, Caroline Pham, confirmed the discussions regarding the introduction of leveraged cryptocurrency products [1] - The exchanges involved in these discussions include CME, Cboe, ICE, and Coinbase Derivatives [1] - This initiative is based on existing provisions of the Commodity Exchange Act, which mandates that retail commodity trading involving leverage, margin, or financing arrangements must occur on regulated exchanges [1]

Core Insights - Investors should consider adding stocks with strong liquidity to their portfolios, as liquidity indicates a company's ability to meet short-term obligations and supports business expansion [1][2] - Four top-ranked stocks recommended for investment include EverQuote, Inc. (EVER), Amicus Therapeutics, Inc. (FOLD), Lam Research Corporation (LRCX), and Cboe Global Markets, Inc. (CBOE) [2][9] Liquidity Measures - Current Ratio: Measures current assets against current liabilities; a ratio below 1 indicates more liabilities than assets, while a range of 1-3 is ideal [4] - Quick Ratio: Indicates a company's ability to pay short-term obligations, with a desirable ratio of more than 1 [5] - Cash Ratio: The most conservative measure, focusing on cash and equivalents relative to current liabilities; a ratio greater than 1 is desirable but may indicate inefficiency [6] Screening Parameters - Asset Utilization: A measure of efficiency, calculated as total sales over the last 12 months divided by the average total assets; companies with a ratio higher than their industry average are considered efficient [7][8] - Growth Score: A proprietary score added to ensure that liquid and efficient stocks also have solid growth potential [8] Company-Specific Insights - **EverQuote, Inc. (EVER)**: Reported revenues of $173.9 million, a 20% year-over-year increase; projected fourth-quarter revenues between $174-$180 million [12][13] - **Amicus Therapeutics, Inc. (FOLD)**: Revenues of $169.1 million, a 19% year-over-year increase; expects total revenues to grow by 15-22% in 2025 [14][15] - **Lam Research Corporation (LRCX)**: Reported revenues of $5.32 billion, a 28% increase year-over-year; projects second-quarter revenues of $5.2 billion [16][17] - **Cboe Global Markets, Inc. (CBOE)**: Achieved record revenues of $605.5 million, a 14% year-over-year increase; raised 2025 organic revenue growth target to low double-digit to mid-teens [18][19]

Core Insights - Wall Street experienced a significant decline on November 6, 2025, primarily due to a sell-off in technology stocks and concerns regarding the ongoing U.S. government shutdown, which is the largest in history [1][9] Investment Strategy - Equity investors are advised to focus on dividend growth stocks rather than high price-yielding stocks, as companies with a history of raising dividends typically demonstrate strong financial health, providing a defensive hedge against economic uncertainty [2][4] - Stocks with a strong history of year-over-year dividend growth are considered to form a healthier portfolio with greater potential for capital appreciation compared to simple dividend-paying stocks [3][6] Selected Dividend Growth Stocks - Five dividend growth stocks identified as solid investment choices include: - **Vertiv (VRT)**: Expected revenue growth of 27.5% year-over-year for 2025, long-term earnings growth rate of 30%, and an annual dividend yield of 0.08% [10][11] - **Tapestry Inc. (TPR)**: Projected revenue growth of 3.20% for fiscal 2026, long-term earnings growth rate of 7.60%, and an annual dividend yield of 1.46% [11] - **HCA Healthcare (HCA)**: Anticipated revenue growth of 7.4% for 2025, long-term earnings growth rate of 12.3%, and an annual dividend yield of 0.61% [12] - **Lam Research (LRCX)**: Expected revenue growth of 12.7% for fiscal 2026, long-term earnings growth rate of 20.3%, and an annual dividend yield of 0.63% [13] - **CBOE Global Markets (CBOE)**: Projected revenue growth of 13.2% for 2025, long-term earnings growth rate of 16.3%, and an annual dividend yield of 1.15% [14] Investment Criteria - Stocks selected for their strong fundamentals include criteria such as: - 5-Year Historical Dividend Growth greater than zero, indicating a solid dividend growth history [6] - 5-Year Historical Sales Growth greater than zero, reflecting strong revenue growth [7] - 5-Year Historical EPS Growth greater than zero, indicating solid earnings growth [7] - Next 3-5 Year EPS Growth Rate greater than zero, suggesting expected earnings growth to sustain dividend payments [7] - Price/Cash Flow less than the industry average, indicating undervaluation [8] - 52-Week Price Change greater than the S&P 500, ensuring stock appreciation [8] - Top Zacks Rank of 1 (Strong Buy) or 2 (Buy), indicating potential outperformance [8][10]

Group 1: Roku, Inc. (ROKU) - Roku has a Zacks Rank 1 and its current year earnings estimate increased by 83.3% over the last 60 days [1] - Roku's shares rose by 27.2% over the last three months, outperforming the S&P 500's increase of 6.8% [1] - The company has a Momentum Score of A [1] Group 2: Fox Corporation (FOXA) - Fox Corporation holds a Zacks Rank 1 with a 5.6% increase in its current year earnings estimate over the last 60 days [2] - Fox's shares gained 20.3% in the last three months, also surpassing the S&P 500's 6.8% increase [2] - The company has a Momentum Score of B [2] Group 3: Cboe Global Markets, Inc. (CBOE) - Cboe Global Markets has a Zacks Rank 1 and its current year earnings estimate increased by nearly 5% over the last 60 days [3] - Cboe's shares increased by 4.4% over the past month, compared to the S&P 500's 0.8% rise [3] - The company possesses a Momentum Score of A [3]

Core Insights - Cboe Global Markets reported record trading volumes in October 2025, with an average daily volume (ADV) of 21.4 million contracts across its four options exchanges, driven by significant increases in multi-listed options and proprietary index options [5]. Trading Volume Statistics - Multi-listed options reached an ADV of 15.9 million contracts, a 47.2% increase year-over-year from October 2024 [3]. - Index options saw an ADV of 5.5 million contracts, marking a 38.6% increase compared to September 2025 [3]. - U.S. equities matched shares on-exchange totaled 2,020 million, reflecting a 56.7% increase from the previous year [3]. - Off-exchange U.S. equities matched shares reached 227 million, a substantial 195.0% increase year-over-year [3]. - Canadian equities matched shares totaled 211,986 thousand, a 33.6% increase from October 2024 [3]. - European equities matched shares were reported at 13,192 million, a 25.2% increase compared to the previous year [3]. - Global FX trading volume was $55,134 million, a 24.3% increase from October 2024 [3]. Notable Records - Trading in S&P 500 Index (SPX) options set multiple records, including a new monthly ADV record of 4.4 million contracts and a single-day record of 6.4 million contracts on October 10 [5]. - The zero-days-to-expiry (0DTE) options also set a monthly ADV record of 2.7 million contracts [5]. Cboe's Business Overview - Cboe Global Markets operates as a leading derivatives and securities exchange network, providing trading solutions across various asset classes including equities, derivatives, and FX in North America, Europe, and Asia Pacific [5].

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying those with genuine growth potential can be challenging due to associated risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - CBOE Global (CBOE) is currently highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth indicating strong prospects [4] - CBOE's historical EPS growth rate is 14.2%, with projected EPS growth of 15.6% this year, surpassing the industry average of 12.1% [5] Group 3: Asset Utilization - The asset utilization ratio (sales-to-total-assets ratio) is an important metric for growth stocks, indicating efficiency in generating sales [6] - CBOE has an S/TA ratio of 0.53, significantly higher than the industry average of 0.25, indicating better asset utilization [6] Group 4: Sales Growth - CBOE is also attractive in terms of sales growth, with expected sales growth of 11.3% this year compared to the industry average of 6.5% [7] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with near-term stock price movements [8] - CBOE's current-year earnings estimates have been revised upward, with a 2.9% increase in the Zacks Consensus Estimate over the past month [9] Group 6: Overall Positioning - CBOE has achieved a Growth Score of A and a Zacks Rank 2 due to positive earnings estimate revisions, positioning it well for potential outperformance [11]