ExxonMobil's earnings are down over the last few years due to lower oil prices. But even when factoring in those lower earnings, the stock ended 2025 around an all-time high. ExxonMobil still sports a dirt cheap price-to-earnings (P/E) ratio of 17.6. ExxonMobil's efficiency improvements and cost reductions position it well to generate cash flow at higher oil prices, which could also pique investor interest and justify a higher P/E ratio for ExxonMobil -- potentially pushing it over the $1 trillion mark in t ...

Green Lights Everywhere… But Is It Time to Tap the Brakes? January 3, 2026 at 3:24 am The economic and market fundamentals appear to be flashing green lights everywhere. Growth is strong, inflation has cooled, and financial conditions have eased. Yet even with clear skies and open roads, experienced drivers know conditions can change quickly. It may not be time to slam on the brakes—but it could be time to keep a foot hovering nearby.After the Federal Reserve aggressively applied the brakes in 2022 with s ...

You can find original article here WealthManagement. Subscribe to our free daily WealthManagement newsletters. Beyond the Magnificent Seven: Unlocking Value in a Concentrated Stock Market “Periods of market concentration don’t always end in a selloff, but narrow leadership can precede weaker returns. The dot-com bubble is perhaps the clearest example. Between 1997 and 2000, the share of US market capitalization held by the 10 largest stocks surged to 24% from 15%, driven by soaring valuations in technology ...

Market Concentration and Performance - The S&P 500 is experiencing historic concentration, with the top 10 companies accounting for over 40% of the index's total weight, leading to a divergence between equal-weighted and capitalization-weighted indices [4][5] - The performance divide indicates that the median stock's performance is not accurately reflected by the cap-weighted index, highlighting the challenges for active investment strategies that typically focus on smaller and mid-cap stocks [5][6] Market Dynamics - High retail participation and speculation are distorting valuation logic, with some stocks trading at levels disconnected from fundamentals, exemplified by Palantir's high multiples [6] - The dominance of AI is influencing market dynamics, with many winning stocks connected to AI, even among smaller companies in the Russell 2000 index, which often have high EV/S ratios despite lacking revenue [6][8] Investment Opportunities - The healthcare sector is identified as mispriced, with a widening valuation gap favoring investors [8] - Capital One's acquisition of Discover is seen as transformative, positioning it to generate substantial value and redefine its competitive standing in the payments landscape [19][29] - The acquisition allows Capital One to leverage a key exemption related to the Durbin Amendment, potentially increasing debit interchange rates and delivering over $1 billion in network synergies by 2027 [21][29] Capital One's Strategic Positioning - The merger with Discover enhances Capital One's scale, making it the largest credit card issuer in the U.S. and improving its loan book mix by reducing consumer subprime risk [26][30] - Capital One's technological infrastructure and operational expertise are crucial for integrating Discover's systems, with expected annual expense savings of approximately $1.5 billion [23][25] - The combined entity is projected to achieve an EPS of $25 by 2027, with a ROTCE exceeding 20%, justifying a higher market multiple than its current valuation [31]

Core Viewpoint - The recommendation to overweight the information technology and communication services sectors in S&P 500 portfolios is being reconsidered due to significant market concentration, with these sectors now accounting for 45% of the S&P 500's market capitalization [1][3]. Sector Analysis - The information technology and communication services sectors have become overly concentrated, suggesting a need for diversification in investment portfolios [3][6]. - The recommendation is shifting towards increasing allocations in financials, industrials, and healthcare sectors, which are seen as having growth potential [4][6]. Market Dynamics - The competitive landscape in the information technology sector is intensifying, with companies facing increased competition and the emergence of startups, particularly in AI [8][10]. - The dominance of the "Magnificent 7" tech companies is being challenged, as they must now invest heavily to maintain their market positions amidst rising competition [9][10]. Future Outlook - The S&P 500 is projected to perform well overall, with a target of 7700 by 2026, despite the current concerns regarding sector concentration [12]. - The healthcare industry is identified as particularly ripe for technological innovation, which could enhance productivity and efficiency [15][16]. - Financial technology (fintech) is highlighted as a rapidly developing area, with innovations like stable coins expected to transform the financial system [17].

Ed Yardi, Yardeni research president and a Wall Street veteran making some waves this morning with his latest call, writing, quote, "It no longer takes makes much sense for us to continue recommending overweighting the information technology and communication services sectors in an S&P 500 portfolio as we have since 2010." Ed's joining me now to break down why he's making this call and some of the risks facing investors with increasing market concentration. Ed, thanks so much. This is a big change for you g ...

Core Viewpoint - Netflix has agreed to acquire Warner Bros Discovery's TV and film studios and streaming division for $72 billion, marking a significant shift in the media landscape as Netflix continues to expand its dominance in the streaming industry [1][3]. Deal Overview - The acquisition follows a competitive bidding process, with Netflix's offer of nearly $28 per share surpassing Paramount Skydance's bid of nearly $24 per share [2]. - Warner Bros Discovery shares closed at $24.5, giving it a market value of $61 billion prior to the deal [2]. - The deal values Warner Bros Discovery at $27.75 per share, comprising $23.25 in cash and approximately $4.50 in Netflix stock, totaling about $72 billion in equity and $82.7 billion including debt [8]. Strategic Implications - The acquisition will enhance Netflix's content library, including popular franchises like "Game of Thrones," "DC Comics," and "Harry Potter," further solidifying its position against competitors like Walt Disney and Paramount [3]. - Netflix aims to secure long-term rights to popular shows and films, reducing reliance on external studios as it explores new growth avenues, including gaming [5]. Regulatory Considerations - The deal is expected to face significant antitrust scrutiny in both Europe and the U.S., as it would give Netflix ownership of a major competitor, HBO Max, which has nearly 130 million streaming subscribers [5]. - Paramount has raised concerns about the sale process, alleging favorable treatment towards Netflix, which may complicate the acquisition [6]. Future Plans - Netflix has committed to continuing the theatrical release of Warner Bros Discovery's films to alleviate concerns about the potential reduction of major film studios [7]. - The deal is anticipated to close after Warner Bros Discovery completes the spinoff of its global networks unit, Discovery Global, expected in the third quarter of 2026 [9].

Wall Street is warning of a correction but is it already here? MFS CEO Ted Maloney says investors should stay the course through the cycle even as he flags growing risks from tech concentration, sky-high valuations, and the push into private markets. He joined Bloomberg Open Interest to talk about why he's urging discipline. ...

Core Insights - The article discusses the current market concentration, particularly focusing on the performance of the "Mag 7" stocks compared to the broader S&P 493, highlighting a significant bifurcation in earnings and profit margins [2][3][5] - It emphasizes the importance of diversification in investment strategies, noting that investing solely in the Mag 7 stocks does not provide adequate diversification within the S&P 500 [5] Market Analysis - Torsten Slok, chief economist at Apollo Global Management, noted that the 2025 EPS consensus estimates for the Mag 7 have increased, while those for the S&P 493 have decreased, indicating a concentration of earnings growth in the Mag 7 [2][3] - The Mag 7 stocks now account for over 40% of the total market capitalization of the S&P 500, which is considered an unusually high concentration [4] Investment Strategy - The article presents a list of the 14 best undervalued stocks to buy under $50, selected based on a forward P/E ratio below 15 and the number of hedge fund holders [7] - The methodology for selection is based on hedge fund sentiment, with the aim of outperforming the market by following top stock picks from leading hedge funds [8] Company Highlights - **Banco Santander, S.A. (NYSE:SAN)**: - Stock Price: $10.29, Forward P/E: 10.40, Hedge Fund Holders: 18 - Reported stable revenue of €46.3 billion and a record net fee income, up 4% year-over-year [11] - Attributable profit for the first nine months of 2025 reached €10.337 billion, an 11% increase from the previous year [12] - Added over seven million new customers, bringing the total to 178 million [13] - **Equinor ASA (NYSE:EQNR)**: - Stock Price: $24.04, Forward P/E: 8.68, Hedge Fund Holders: 19 - Received a Hold rating with a price target of $22 [15] - Awarded new framework agreements valued at approximately NOK 17 billion for insulation and scaffolding services at its onshore plants in Norway [17]

Let's kick it off with one of the smartest people out there. Apollo global management chief economist Torsten Sllock. Love the stuff and the data that you and your team put out.Torston, one of those is this. Earnings expectations for the so-called magnificent 7 have gone up. But for the other, say 493 S&P 500 stocks, they have not.How do we read that. Well, the key issue here is that since the beginning of the year, we've seen a very bifurcated market obviously and is not only in terms of performance, but w ...