Personal Finance News

Stocks have rallied so sharply in the past few months that it prompts a question: Are we in a new bull market? With the S&P 500 index up 36% since its March 23 low through mid June, the answer seems an obvious yes. And yet, plenty of veteran Wall Streeters say the bull isn’t official yet, and we’ve seen some cracks in the rally.

Conventional wisdom says stocks are in a bull market once they’re up at least 20% from the market’s low. (A bear market is typically thought of as a 20% drop from the high.) But given that bear markets are often punctuated by powerful rallies that ultimately fade, it’s important to add a time element to a bull-market assessment. Sam Stovall, the chief investment strategist at investment research firm CFRA, defines a bull market as a gain of at least 20% plus a span of six months without the market undercutting its prior low.

Official or not, however, Stovall is a bull. CFRA’s 12-month target for the S&P 500 is 3435, 13% higher than its June 12 close. “I think the March 23 low will eventually be regarded as the start of the new bull market,” says Stovall. “The reason for my optimism is the massive amount of stimulus” injected into the market and the economy by the Federal Reserve and Congress. CFRA is most bullish on the communication services, health care and information technology sectors.

Doug Ramsey, chief investment officer and portfolio manager at the Leuthold Group, remains dubious. “The current rally is either the first up-leg of a new bull market or the second-largest bear-market rally in the past 125 years,” he says. On the one hand, you’ve got unprecedented monetary and fiscal stimulus. On the other hand, says Ramsey, price-earnings multiples at the market’s March low remained much higher than in other post-WWII market troughs, making it the priciest bear-market low in history—if it stands. “I still think there’s a chance we could break below those lows,” he says. “I’m trying to look at the glass as half-full, but how can we embark on a multiyear bull market when we’re at valuations that are so much higher than what they were at the same stage of the last bull market?”

A close above the 3386 level for the S&P 500, eclipsing its February high, would settle the question of bull-

Read more: https://www.kiplinger.com/investing/600961/new-bull-market-or-same-old-bear

Stocks struggled for direction on the first trading day of the second half, as promising news about a possible COVID-19 vaccine and better economic data were tempered by a drop in energy stocks.

A reading that showed U.S. manufacturing activity hit its highest level in more than a year helped bullish sentiment, as did an announcement that Pfizer's (PFE, +3.2%) coronavirus vaccine under development was found to be well tolerated in early-stage human trials.

In a countervailing trade, energy stocks declined amid fears that the U.S. could see a return to widespread lockdowns to slow the spread of COVID-19.

Strength in the technology sector kept the Nasdaq aloft. Amazon (AMZN, +4.4%) and Facebook (FB, +4.6%) in specific gave the tech-heavy composite enough oomph to gain 1.0% to a record-high 10,154. The S&P 500 finished 0.5% higher to 3,115, while the Dow closed Wednesday down 0.3% to 25,734. The small-cap Russell 2000 lagged them all, dropping 1.0% to end at 1,427.

While fears of shutdowns dragged down economically sensitive small caps and the energy sector, Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, offers up some optimism for investors in his midyear outlook:

"The real question about the coronavirus for the rest of 2020 is not if there will be a second wave, but whether it will be large enough to derail the economic recovery underway," he writes. "So far, it does not look like it will. As of late June, we are seeing significant second waves in several states, and rising case counts in many others.

"Although it is quite possible we will see lockdowns locally, a national shutdown looks unlikely, which should allow much of the recovery to continue."

As uncertain as the pandemic has made investors of all stripes, one thing Wall Street can agree on is that coronavirus has changed the way we live and, by extension, the way we invest.

Health-care stocks were once thought to be boring-but-solid value stocks, and not much more. Now, fear of new diseases has caused some of these defensive, nest-egg investments to morph into growth stocks.

Read more: https://www.kiplinger.com/investing/stocks/601012/stock-market-today-nasdaq-starts-q3-by-reaching-new-heights

Many businesses have taken at least a short-term hit from the COVID-19 economic shutdown, but a few fortuitously positioned companies have actually thrived. And arguably the biggest winners have been so-called work-from-home, or WFH, stocks.

Many tech companies in industries such as video conferencing and cloud storage have seen their shares easily beat the market through 2020's first half, in some cases doubling and even tripling. These companies were already enjoying stepped-up investments in software and services that enable remote work, but the COVID-19 pandemic took that shift into overdrive.

Many experts believe work-from-home is a trend with legs. What began as a temporary way to keep employees safe is becoming a permanent movement for large companies including Facebook, Nationwide, Mondelez and Barclays, who see remote work as a way to reduce office rents and tap a broader talent pool. According to a Gartner Group survey, 75% of companies plan to let more employees work remotely. Employees are embracing this trend too; a Gallup poll shows 60% want to continue working remotely after restrictions end.  

Here are 17 work-from-home stocks to buy that are at the epicenter of this phenomenon. Each of these provides a way to leverage this trend well into the future – including one play that lets you invest across dozens of WFH stocks at once.

Read more: https://www.kiplinger.com/investing/601008/work-from-home-stocks

Video games aren’t just games. They are also TV content, judging by the millions of people who watched some 1.75 billion hours of streamed video-gaming programming on Twitch, the live-stream platform for gamers, just in May alone. They’re live events, too, with thousands of people showing up to watch top-level gamers face off in e-sports arenas. That makes video games big, big business. Consultant Research and Markets forecasts that the global video-game market will increase revenues at a 6.4% annualized rate between 2019 and 2024, when it will hit $179.1 billion in sales.

Global X Video Games & Esports ETF is one of a handful of funds that allow investors to cash in on that growth. HERO sports a tight portfolio of 40 firms involved in developing, publishing, distributing or streaming video games, producing related hardware, or operating e-sports leagues or teams. The fund weights holdings by market value, so the larger the stock, the more HERO invests in it. Gaming is global, and so is HERO; it has 71% of assets invested outside of the U.S.

The ETF will only invest in companies that derive at least 50% of their revenues from video game–related businesses. That means you won’t see tech conglomerates such as Sony and Microsoft in the fund. You will see graphics chipmaker Nvidia, whose products power high-end gaming rigs; Chinese internet and video gaming company NetEase; and familiar Japanese powerhouse Nintendo. “If it’s a leading company in the theme, we want to own that company,” says Pedro Palandrani, research analyst at Global X ETFs.

Read more: https://www.kiplinger.com/investing/etfs/600955/get-in-the-game-with-global-x-video-games-esports-etf

None of the members of the Kiplinger Dividend 15—the list of our favorite dividend-paying stocks—has cut or suspended its dividend this year. In most years, that wouldn’t be news. But in response to the pandemic, more than 60 firms in the S&P 500 index have battened down the financial hatches by slashing or eliminating their payout. The Dividend 15 yield 3.4%, on average, well above the 1.9% yield of the S&P 500 and the paltry 0.7% from 10-year Treasury notes. (Prices, returns, yields and other data are as of June 12.)

Stocks on our list, like the broad market, tumbled in February, then rallied mostly back. In 2020, our picks have lost 6.5%, on average, compared with a 5.0% loss in the S&P 500. But amid plummeting fuel demand and sagging oil prices, energy stocks in the S&P 500 have surrendered an average of 32% in 2020. Among our energy picks, Enterprise Products Partners (symbol EPD) lost 29.7% and ExxonMobil (XOM), 30.1%.

Enterprise Products Partners charges other energy firms to transport and store oil, natural gas and other petrochemicals using its network of pipelines and oil facilities. Slowdowns in exploration and pro­duction have dinged profits. But Enterprise enjoys a diverse array of high-quality clients and produces ample cash to fund its payout. The firm pays 66% of excess cash as a distribution, well below the 90% threshold that would be concerning for a master limited partnership, says Brian Bollinger, president of research firm Simply Safe Dividends. It stays on our list.

But Exxon comes off. Oil prices have come up from their April lows, but the recent per-barrel price of $36 is still a losing proposition for ExxonMobil, and Wall Street analysts expect it to lose more than a dollar per share in 2020. If oil prices stay low, Exxon will have to borrow money and sell assets to maintain its payout, which CEO Darren Woods says the firm is committed to doing. Exxon held its dividend steady in April—the month when the firm has historically hiked its payout. Whether Exxon continues its 37-year streak of raising the dividend or merely holds it steady, we’re concerned that a prolonged period of low oil prices could damage the firm’s balance sheet and diminish future spending on growth projects. Investors who hold t

Read more: https://www.kiplinger.com/investing/600953/dividend-15-rally-after-running-out-of-gas

The pandemic has put the health care industry under a global spotlight. Biotechnology and big pharmaceutical firms are front and center as the world races toward a vaccine for COVID-19. There may be many winners, and there may be a few losers, but the current crisis has reminded the world that we are living in a new age of science. 

Cures for chronic infectious diseases, targeted cancer therapies and gene editing are just a few of the breakthroughs made in the past decade. And more discoveries are coming. “The speed of science is increasing,” says Joshua Riegelhaupt, assistant manager of Baron Health Care fund. “That’s why we think this is the century of biology,” he says.

These developments are improving the standard of care, says Julia Angliss, an investment manager with a specialty in health care at investment firm Baillie Gifford. “We understand more what drives diseases, and we’re able to develop drugs that are more precise, more efficient and more effective,” she says. The investing landscape is changing, too. Many health care stocks that were once considered defensive, nest-egg investments have morphed into growth stocks. Investors can bank on more change. We are in “the early innings of transformative global change due to innovation in health care,” says Riegelhaupt.

With that in mind, we set out to find stocks poised to follow new approaches in health care that can save costs and improve outcomes.

Stock prices and other data are through June 12.

Read more: https://www.kiplinger.com/investing/stocks/healthcare-stocks/600975/10-stocks-to-invest-in-the-health-care-revolution

In February, the U.S. State Department issued a Global Level 4 Health Advisory—its most dire warning—that it summarized in three words: “Do Not Travel.” Passing through Transportation Security Administration checkpoints a day later were 146,348 fliers, 93% fewer than the same date a year earlier.

The coronavirus has grounded even the most avid travelers this year. In a survey by market research firm Longwoods International, 67% said the pandemic had affected their travel plans for the next six months.

So what’s a globe-trotting, nature-loving, house-bound culture vulture to do? Plenty. You can still visit museums and marvel at their great works of art, tour historical landmarks and stroll through foreign cities. And you can do it all from home as a virtual sightseer because these sights can be toured online for free.

Fine Art. If you like fine art, for example, you will love Google Arts and Culture. The website, which the Paris-based Google Cultural Institute launched in 2011, has organized more than 3,000 professionally curated online exhibitions of artifacts, photographs and paintings from museums around the world. Now you can get up close to view famous masterpieces like Edvard Munch’s “The Scream” or lesser-known works like Claude Monet’s 1875 portrait of his fellow Impressionist artist Pierre-Auguste Renoir.

Landmarks. Social distancing won’t keep you from virtually visiting some of the world’s famous structures. On the same Google Arts and Culture site discover what it’s like to stand atop the Taj Mahal or stroll through the rooms of the Palace of Versailles, enjoying 360-degree views of both places and a zoomed-in look at the details. Elsewhere online, take a hot-air balloon ride over the Buddhist temple complex in Bagan, Myanmar, or walk through Petra, the Jordanian city of palaces, temples and tombs carved out of sandstone 24 centuries ago.

History. In the U.S., the National Women’s History Museum has exhibits on women’s suffrage as well as the considerable contributions black women have made to the civil rights movement and as mathematicians for NASA and its predecessor, the National Advisory Committee for Aeronautics.

The Museum of Fligh

Read more: https://www.kiplinger.com/retirement/601009/retirees-see-the-world-without-leaving-home