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 ...

I do want to welcome in our next guest, talk more broadly about the markets. Joining us this morning is Eddie Gabbor. Uh he is the owner of Key Advisors Wealth Management.Eddie, thank you for being with us as always. You know, a sea of red to kick off this Tuesday morning. You know, takeaways on the action we've seen so far this week.>> So, I think we're going to see a very similar month as we saw in October. In October, we had the VIX spike over 20. Uh we had some names that had a lot of froth in them lose ...

[Music] [Music] Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer, my friends.I'm just trying to make a little bit of money. My job is not just to entertain, but to teach you. So call me 1800 743 CBC.Tweet me at Jim Kramer. When you read about how we have such an extreme concentration of market capitalization in barely more than a handful of companies. There's a natural tendency to want to avoid them.>> Who wants to own stocks like the Magnificent Seven. They've had such huge runs. You can probably g ...

AI & Market Performance - AI is a significant tailwind powering the market, with Nvidia at the center, driving transformational changes [2] - Nvidia's market cap potentially hitting $5 trillion is a key indicator of the AI trade's strength [1][4] - The market's all-time highs are partly attributed to Nvidia's performance and the broader AI trend [2] Market Concentration & Risks - Market breadth is narrow, with few stocks driving indices higher, raising concerns about concentration [3] - Concentration is in companies with strong balance sheets, cash flows, and capital expenditures, differentiating it from the dot-com bubble [4] - Earnings from the "Magnificent Seven" (Mag 7) are crucial, as they constitute a quarter of the S&P 500's market cap [6] - High earnings expectations for the Mag 7 (around 14%) could lead to market volatility if not met [6] Investment Strategy & Economic Outlook - Maintaining portfolio diversification is crucial due to potential market volatility [10] - Taking profits in stocks up 50-100% in the last 6 months is advisable for diversification [11] - The labor market appears stable based on ADP payrolls, but widespread layoffs would be a concern [12][13]

Group 1: Labor Market and Job Cuts - Amazon and UPS announced combined job losses of at least 62,000, indicating a potential weakening in the labor market [1] - The job cuts are among the largest publicly confirmed in a year marked by a steady trend of firms reducing their workforce [1] Group 2: Tech Sector Developments - Microsoft and OpenAI reached a deal allowing OpenAI to restructure into a public benefit corporation, valuing it at $500 billion [3] - The deal between Microsoft and OpenAI contributed to a wave of tech euphoria, lifting Wall Street to new highs [6] - Big Tech firms have significant commitments and joint ventures worth hundreds of billions, with OpenAI and Nvidia being heavily involved [2] Group 3: Stock Market Performance - U.S. stock markets reached new highs, with Apple hitting a $4 trillion market cap and notable gains in UPS, Nvidia, and Microsoft [4] - The concentration of the top U.S. stocks accounted for 33.8% of total market cap at the end of September, indicating a high level of market concentration [11] Group 4: Federal Reserve and Economic Outlook - The Federal Reserve is expected to cut interest rates by a quarter of a percentage point, with further cuts anticipated in December and next year [7] - Potential changes to the Fed's balance sheet and the end of quantitative tightening (QT) could lead to bond purchases in the near future [8]

Market Sentiment - Current market sentiment is cautious, with concerns over high valuations and potential bubbles in AI capital spending, as the forward PE ratio on the S&P is at 23 times, compared to 25 during the tech bubble [2][3] - Despite companies beating earnings expectations, there is uncertainty about future performance, leading to jittery market conditions [3][4] Earnings Performance - Tesla missed profit expectations, while IBM beat expectations and raised guidance but still saw its stock trade lower, indicating mixed investor sentiment [1] - A significant rally of 38% off a low is noted, the largest in over 50 years, but a pullback of 3% to 5% is anticipated [5] Economic Outlook - The economy is perceived to be stronger than labor market indicators suggest, with no imminent bear market expected without a recession [6] - Upcoming fiscal and monetary stimulus in 2026 is expected to support earnings growth, with large caps projected to grow by 13.3% and small caps by 22% year-over-year [6] Currency Impact - The dollar has strengthened by over 1.5% in the last month, which may impact future earnings, especially as a weaker dollar has previously benefited earnings [7][8] - Record net capital inflows from foreign investments in U.S. treasuries are expected to support a rally in the dollar, potentially putting pressure on international investments [9] Healthcare Sector - The healthcare sector has been upgraded due to attractive valuations despite regulatory uncertainties and pressures from drug pricing reforms [11] - Long-term demographic trends, managed care demand, and biotech innovation are expected to provide strong tailwinds for the healthcare sector [12]

Market Overview - The third quarter of 2025 saw strong corporate earnings, resilient economic growth, and falling interest rates, positively impacting stock markets globally [2] - The S&P 500 Index achieved 23 record closes and had its best September in 15 years, driven by investor optimism from strong earnings and AI enthusiasm [2] - Canadian equities outperformed many global peers, particularly in the metal and mining sectors, with gold producers benefiting from a bullion rally [3] Central Bank Actions - Global central banks, including the Federal Reserve and the Bank of Canada, took cautious steps toward monetary easing, with the Fed cutting rates for the first time in 2025 [4] - The Bank of Canada reduced its overnight rate to 2.5%, while the European Central Bank maintained steady rates amid concerns over inflation [4] Market Dynamics - Despite global trade disruptions, inflationary impacts have been less severe than anticipated, aided by companies pre-buying inventory and diversifying supply chains [5] - AI-related stocks have significantly contributed to the S&P 500's returns since the launch of ChatGPT, raising concerns about market concentration and potential bubbles [6] Company Performance - TSMC and semiconductor equipment companies like ASML performed well due to the AI backdrop, while Tencent's shares rose on improved advertising returns attributed to AI [11] - Companies with software-related business models, such as RELX and Wolters Kluwer, faced declines due to AI-related concerns, although their core businesses remained resilient [12] - In Canada, Shopify reported a 30% annual growth in gross merchandise value, and major banks posted strong earnings, benefiting from expanding net interest margins [16] Fixed Income and Bonds - Canadian bonds posted positive returns, supported by a Bank of Canada rate cut and tightening corporate credit spreads [8] - Longer-dated bond yields remained elevated compared to pre-pandemic levels, reflecting investor caution regarding government debt issuance [8] Future Outlook - Equity markets are expected to remain strong, with AI-related sectors continuing to dominate earnings growth, although there are risks of a bubble forming [19] - The U.S. business cycle appears distorted by government spending, with traditional macroeconomic signals indicating ongoing weakness [20] - The company remains focused on fundamentals, preferring firms with competitive advantages and sustainable cash flows [21]

Market Sentiment and Valuation - Stocks are at record highs, but Wall Street strategists warn that the prevailing optimism may indicate potential vulnerabilities in the market [1][4] - The Nasdaq 100 has surged approximately 46% since April lows, driven by enthusiasm around AI, raising concerns about profit-taking risks, particularly for the Nasdaq [2][6] - Citi's Levkovich Index indicates that markets are in a state of euphoria, historically associated with weaker returns due to limited room for upside surprises [3][4] Investor Behavior and Market Concentration - Client sentiment is at its highest since December, with Barclays' sentiment tracker also indicating "exuberant" conditions, suggesting overconfidence among investors [4][6] - The S&P 500 is trading at about 25 times expected earnings, implying a need for earnings to increase by 13% next year and another 10% in 2027 to justify current valuations [5] - Concerns are rising regarding market concentration and speculative behavior, with a narrow rally primarily driven by a few AI-focused companies, leaving investors with little margin of safety [6][7] Market Dynamics and Future Outlook - The current market is described as running "extremely hard," showing signs of speculation and greed, which typically precede market pullbacks [8] - The rapid climb of the market is beginning to exhibit classic signs of exhaustion, indicating potential challenges ahead [7][8]