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NEW DELHI: The Nifty Auto index traded negative around 10:08AM(IST)on Friday in a weak market.Bosch Ltd.(up 2.23 per cent), Tata Motors Ltd.(up 1.2 per cent), MRF Ltd.(up 0.62 per cent), Apollo Tyres Ltd.(up 0.38 per cent) and TVS Motor Company Ltd.(up 0.35 per cent) were among the top gainers.<figure class="image image_resized" style="width:100%;"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/AA_1qu_Atz_f13ab4fa2f.jpg" alt="AA1quAtz.jpg"></figure>Samvardhana Motherson International Ltd.(down 2.29 per cent), Mahindra &amp; Mahindra Ltd.(down 0.65 per cent), Maruti Suzuki India Ltd.(down 0.49 per cent), Eicher Motors Ltd.(down 0.44 per cent) and Hero MotoCorp Ltd.(down 0.18 per cent) were the top losers on the index.The Nifty Auto index was down 0.02 per cent at 25774.8 at the time of writing this report.Benchmark NSE Nifty50 index was down 51.91 points at 25337.0, while the BSE Sensex was down 164.54 points at 82798.17. Among the 50 stocks in the Nifty index, 19 were trading in the green, while 31 were in the red.Shares of Vodafone Idea, YES Bank, IDBI Bank, Tata Steel and Suzlon Energy were among the most traded shares on the NSE.Shares of KDDL Ltd, Edelweiss Financial, Servotech Power Syst, Bharti Hexacom and Campus Activewear hit their fresh 52-week highs in today's trade, while Stampede Cap(DVR), Viji Finance, Alps Industries, Rollatainers Ltd and Nila Spaces hit fresh 52-week lows in trade.

Bosch Ltd.(up 2.23 per cent), Tata Motors Ltd.(up 1.2 per cent), MRF Ltd.(up 0.62 per cent), Apollo Tyres Ltd.(up 0.38 per cent) and TVS Motor Company Ltd.(up 0.35 per cent) were among the top gainers.

Stock market update: Nifty Auto index falls 0.02% in a weak market

Trump Media &amp; Technology Group&nbsp;(DJT&nbsp;-6.60%)&nbsp;has been one of the most polarizing stocks to own this year. When the optimism surrounding Donald Trump's chances of winning the presidential election was high, the stock was doing well. But when the outlook changed, the stock quickly went into negative territory.What's sometimes forgotten is that there's a real company behind the stock, not just the former president. Trump Media may not be much of a business right now, but its fundamentals are still the ultimate reason why investors should consider investing in the stock or not.However, the company's future is uncertain, and a lot seems to be hinging on whether the former president gets elected this year. Is this stock too risky to own? Could it ultimately be headed to $0?<figure class="image image_resized" style="width:100%;"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/a573cfd2ea868773a9dc3f626cf1480f_a3213d9723.png" alt="a573cfd2ea868773a9dc3f626cf1480f.png"></figure><h2 style="margin-left:0px;">It has the classic signs of a meme stock</h2>Trump Media generates minimal revenue, and the social media platform Trump Social isn't exactly taking off and giving other social media stocks cause for concern. As is the case with other&nbsp;meme stocks, factors outside of the company's core operations impact its share price, not its fundamentals.When President Joe Biden announced he was dropping out of the election in July, shares of Trump Media stock proceeded to fall, as speculators likely saw worsening prospects for Trump winning against Democratic candidate Kamala Harris than they did against Biden. Since that announcement on July 21, Trump Media has lost half its value.Another feature of a risky meme stock is that there are often plenty of&nbsp;short-sellers&nbsp;betting against it. The stock has averaged a fairly high short interest of more than 7% this year, and that percentage has been rising in recent weeks.&nbsp;This opens the door to a possible&nbsp;short squeeze&nbsp;if speculators become more bullish on Trump's chances, which would add to the overall risk and volatility that may come from owning the stock.<h2 style="margin-left:0px;">The fundamentals are what matter, and they aren't great</h2>Trump Media doesn't report user metrics -- likely because they aren't all that impressive. After all, they could help give investors a reason to buy the stock if they were good. At least they could provide investors with the hope that there's potential for the platform to draw interest from advertisers down the road, even though the business isn't profitable today and revenue isn't strong,I always look at the information a company leads with when it reports earnings, as that can help indicate what it thinks is most important for investors to focus on. For an unprofitable company, it might be user growth or some other metric to suggest it's doing well, such as shrinking losses.In Trump Media's August press release announcing earnings, the top bullet point was that it had $344 million in cash and no debt on its books. That's not exactly exciting for&nbsp;growth investors. Simply having a lot of cash doesn't make a business worth investing in, especially if it's not generating much revenue and burning through money -- as is the case with Trump Media.An average investor who's looking for a quality stock would likely pass on Trump Media stock because there isn't much substance behind it. At this point, it's largely a speculative play.<h2 style="margin-left:0px;">Is the stock heading to $0?</h2>Trump Media stock could rally if speculators believe Trump's prospects for winning the upcoming election look good and become more bullish on his chances. That would still be a short-term reason to bet on the stock -- not to&nbsp;invest in it for the long term.A short-term move fueled by election hopes wouldn't change the fundamentals, which are what matter most for investors. If the business isn't demonstrating meaningful growth in its operations, isn't profitable, and isn't generating positive cash flow, there's little reason to expect the stock to go anywhere but down.These are the reasons I think Trump Media stock ultimately will get to $0. It just may be a matter of how long until it gets there and what path it takes.

Trump Media & Technology Group (DJT -6.60%) has been one of the most polarizing stocks to own this year. When the optimism surrounding Donald Trump's chances of winning the presidential election was high, the stock was doing well. But when the outlook changed, the stock quickly went into negative territory.

Is Trump Media & Technology Stock Heading for $0?

Stock splits are essential to a functional stock market even though they don't affect the value of a company. Think of a company's market cap (value) as a pie or a pizza, if you prefer. All the split does is create more slices; it doesn't make the whole any larger. However, they are still essential, especially for those who aren't billion-dollar hedge funds. Microsoft (MSFT 0.17%) has split its shares nine times, most recently in 2003. A single share would cost $123,800 today without stock splits. That price is out of reach for many, if not most investors to buy a single share. And, as you can see below, the price is towering again.<figure class="image image_resized" style="width:100%;"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/3cdfca261af7d8e570b42af33c63039b_873c77163a.png" alt="3cdfca261af7d8e570b42af33c63039b.png"></figure>Splits also indicate that a company is booming, since the share price must have grown significantly. Unlike Microsoft, ServiceNow (NOW 1.54%) has never split; however, with share prices of $879, this could change soon.Here is why these companies are having tremendous success.Microsoft The release of the generative AI chatbot ChatGPT pushed the AI race to the center of society's and investors' consciousness. When Microsoft made a multibillion-dollar investment in its creator, OpenAI, it was full throttle for tech companies to catch up. ChatGPT integrates with Microsoft Bing, which could allow Bing to steal some market share from Alphabet's Google Search, which generated $95 billion in revenue in the first half of 2024. Even small inroads for Bing will generate billions in revenue.Another major AI product is Microsoft Copilot. Copilot integrates into several products, answers questions, summarizes or generates text, creates images, codes, and analyzes data. According to Microsoft, 60% of the Fortune 500 use Copilots, a staggering figure given the technology's newness. These innovations drove sales growth of 16% in fiscal 2024 to $245 billion. Operating income grew 24% to $109 billion, a terrific 45% margin.Microsoft stock trades at 36 times earnings, which is higher than its three-year and five-year averages of 33; however, the price-to-earnings (P/E) ratio drops to 33 on a forward basis. Due to the lofty valuation, investors shouldn't expect the price to skyrocket overnight. Still, Wall Street can justify the current price based on Microsoft's AI opportunities.ServiceNow ServiceNow and Microsoft have partnered for years on many technology initiatives. The latest integrates ServiceNow's AI product, Now Assist, with Microsoft Copilot. Without boring you with too many technical details, the Now Assist product increases productivity in areas like human resources, IT support, customer service, and others. For example, Now Assist saves customer service agents time by summarizing a customer's recent interaction so the agent doesn't have to go through the transcript, allows agents to search vast databases quickly to find answers faster, etc. The increased productivity is invaluable for companies in a highly competitive world.<figure class="image"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/download_317e644b63.avif" alt="download.avif"></figure>Around 85% of the Fortune 500 use ServiceNow. The chart below shows just how much ServiceNow's customer base has grown. Each year that a customer adopts ServiceNow is represented by a different color, and the expansion shows the increased revenue from these customers over time.ServiceNow is in a higher growth phase than Microsoft ($2.6 billion in sales on 22% growth last quarter), so sales rather than bottom-line earnings better represent its valuation. Its current price-to-sales ratio is 18, which aligns with its 5-year average. Looking forward, the company expects 2024 subscription sales of $10.5 billion, and $15 billion in 2026. This means the stock price could conceivably return nearly 50% through 2026 by maintaining the same valuation.Microsoft and ServiceNow are making huge moves in AI, and with soaring stock prices, splits may be on the horizon.

Stock splits are essential to a functional stock market even though they don't affect the value of a company. Think of a company's market cap (value) as a pie or a pizza, if you prefer. 

Stock-Split Watch: 2 Artificial Intelligence (AI) Companies That Look Ready to Split

Super Micro Computer stock (NASDAQ: SMCI) has seen a big sell-off in recent months, falling from highs of nearly $1,200 per share in March to about $445 presently. There have been a couple of trends driving the sell-off including concerns about gross margins, some supply chain issues, and the company’s delay in filing its Form 10-K with the SEC, after short-seller, Hindenburg Research accused the company of irregularities with its accounting. Despite these setbacks, the stock remains up by about 7x from 2022, driven by surging demand for server systems fueled by the generative artificial intelligence wave. However, with these challenges, the stock could decline further, possibly touching around $200 per share.<figure class="image image_resized" style="width:100%;"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/960x0_8_eed079d9cd.webp" alt="960x0 (8).webp"></figure>Super Micro stock trades at just about 18x trailing earnings and 12x forward earnings at the current price level. Although this isn’t a very high multiple, there’s a very real possibility that Super Micro’s earnings could decline after a couple of years of stellar growth. Moreover, the uncertainty relating to compliance-related matters could weigh on the stock. This analysis outlines how the stock could decline by about 50% in the next few years by looking at the company’s potential revenue growth, net margins, and price-to-earnings multiple. While this article spotlights the downside case for the stock, the upside case can be seen here: Can Super Micro stock fare better than AI bellwether Nvidia?SMCI Rallied Big But Witnessed Considerable VolatilitySMCI stock has generated better returns than the broader market in each of the last 3 years. Returns for the stock were 39% in 2021, 87% in 2022, and 246% in 2023. However, the stock has also declined by roughly 60% since March 2024 making it a relatively volatile bet. In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has outperformed the S&amp;P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment around rate cuts and multiple wars, could SMCI see a strong jump?Revenues Could Fall As Server Investment Cycle TurnsSuper Micro Computer is a data center solutions provider, which sells server systems, server boards, storage, networking solutions, management software, and installation and maintenance services. SMCI is projected to grow its revenue by close to 90% in FY’25 (the current fiscal year) to levels of about $28 billion, per consensus estimates, as data center-related spending remains strong, with tech companies continuing to invest in AI and accelerated computing capacity. However, the current euphoria might be masking the fact that the server market can, in fact, be cyclical and things could take a turn for the worse.The underlying economics of the end market for the broader AI ecosystem remain weak, and most of AI customers remain loss-making. Large language models are also very expensive to build and train. We could very well be in a phase where companies are seeing so-called FOMO, compelling them to invest in AI just because their rivals are doing so, without a thought about the return on investments. As shareholders seek better returns, we could see capital spending cool off, impacting the likes of Super Micro. Moreover, most AI companies are going through the compute-intensive training phase at the moment, and there’s a real possibility that demand for computing power and servers could cool off once these companies move to the less compute-intensive deployment phase. The server market is also very commoditized. While Super Micro does have some competitive advantages, given that its products are seen as being more customizable, the company’s lead in these areas is hardly insurmountable and competition could mount considerably. Considering a potential cooling of demand and higher competition, if SMCI’s revenues decline by about 15% each year over FY’26 and FY’27 revenues could stand at $20 billion by FY’27. Looking for more companies that can benefit from increased digitization and AI deployment?Combine this weaker-than-expected revenue growth with the possibility that Super Micro’s adjusted net margins (net income, or profits after all expenses and taxes, calculated as a percent of revenues) can decline a bit. Although margins expanded from 6% in FY’22 to about 9% in FY’24, driven by higher economies of scale, they could decline meaningfully if sales drop and competition mounts reducing the company’s volumes and pricing power. Moreover, SMCI has seen its gross margins face some pressure in recent quarters as it sells a higher mix of liquid-cooling systems, which are proving expensive to produce and this trend could also continue. Considering this, it may be reasonable to assume that Super Micro’s adjusted net margins could decline from an estimated 9% this year to about 6.5% by FY’27, or about 0.72x current levels.Valuation Multiple Could ContractIf revenues decline by about 0.7x between FY’25 and FY’27, with margins contracting by about 0.72x over the same period, this would imply that earnings could fall by about 0.5x. Now if earnings fall by 50%, the P/E multiple is bound to take a hit as investors re-assess SMCI’s overall long-term earnings growth prospects. If SMCI’s P/E multiple gradually shrinks from a multiple of about 12x based on FY’25 earnings presently to about 10x, this could translate into a decline in SMCI stock to levels of under $200 per share by 2027. What about the time horizon for this negative-return scenario? In practice, it won’t make much difference whether it takes 2 years or 5 - if the competitive threat plays out and SMCI sees the demand cycle turn, we could see a correction. And a sizable one at that.&nbsp;

Super Micro Computer stock (NASDAQ: SMCI) has seen a big sell-off in recent months, falling from highs of nearly $1,200 per share in March to about $445 presently. 

A Scenario Where Super Micro Stock Could Fall 50%

Perhaps no stock has risen more so fast than Nvidia (NVDA 8.15%). At one point, it was up by about 1,000% in less than two years, briefly taking its market cap north of $3.2 trillion before it pulled back.However, the run-up in the company's stock was so extreme that even its stellar earnings report for the second quarter of fiscal 2025 (ended July 31) failed to prevent a significant sell-off in its stock. Between the company's likely overvaluation and a momentum shift, investors should probably avoid the semiconductor stock for the remainder of 2024.<figure class="image image_resized" style="width:100%;"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/screenshot_1726131135_c823c63407.png" alt="screenshot_1726131135.png"></figure>The state of Nvidia In light of the recent pullback, investors need to exercise some perspective. The scorching demand for AI chips and Nvidia's considerable lead in this niche of the chip industry arguably make it the premier semiconductor stock.The growth in the AI chip market has been so explosive that Allied Market Research forecasts a compound annual growth rate (CAGR) of 38% through 2032. This is far above the 6% CAGR that Allied forecast for the overall chip industry through 2031.Additionally, Nvidia appears poised to begin shipping its next-generation AI chip Blackwell in the fourth quarter. This should help it maintain its market lead as its competitors struggle to catch up to the chip giant.Considering Nvidia's technical lead, current shareholders should probably stay in the stock because it will likely remain a long-term winner. In time, it may even replace the struggling Intel as a Dow 30 stock.So, what happened? Despite Nvidia's huge potential, the short-term outlook for its stock looks increasingly bleak. Amid several quarters of triple-digit revenue growth, the company eventually fell short of increasingly elevated expectations. Consequently, the stock is down by about 25% from its 52-week high.Admittedly, its gains may have appeared justified from the perspective of its price-to-earnings ratio (P/E). At just 48 times earnings, Nvidia may look undervalued when considering the company's triple-digit percentage revenue and earnings growth.Still, the other metrics may have left investors questioning Nvidia's current price. Its price-to-sales (P/S) ratio had exceeded 40 as recently as July, and the current sales multiple of about 27 makes it expensive by just about any measure.<figure class="image image_resized" style="width:100%;"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/screenshot_1726131148_4e018965df.png" alt="screenshot_1726131148.png"></figure>Also, its valuation looks more stratospheric when taking into account its price-to-book value ratio of 43. With AMD and Qualcomm selling at a respective 4 times and 7 times book value, Nvidia may have trouble justifying its huge premium.Moreover, investors tend to sour on stocks with slowing growth, even when the growth rate is robust. This may not be fair, but the fact is that triple-digit growth numbers are unsustainable over the long term. Also, customers are likely to turn to the company's competitors' slower but available AI chips as Nvidia struggles to meet demand.Additionally, investors need to keep the history of Nvidia stock in mind. Despite the gains of more than 20,000% during the past 10 years, the stock has also fallen by more than 50% twice during that period.Such sell-offs tend to occur because the chip industry and its stocks move in cycles. While the upward moves in this stock have handsomely rewarded shareholders, they have also had to endure brutal sell-offs. With Nvidia likely in a bear phase now, investors may want to wait until 2025 before they consider adding shares.Nvidia stock's future Given Nvidia's momentum and its high valuations, investors should probably refrain from adding the company's shares in the last months of 2024. Admittedly, the bull market in AI chips is likely not over, and current shareholders should benefit in the long term by staying in the stock.Nonetheless, both investor expectations and the stock price appear to have become too detached from the fundamentals. Thus, investors should probably wait a few months before adding to positions in Nvidia stock.

Perhaps no stock has risen more so fast than Nvidia (NVDA 8.15%). At one point, it was up by about 1,000% in less than two years, briefly taking its market cap north of $3.2 trillion before it pulled back.

Prediction: Nvidia Stock May Tumble in the Remainder of 2024

Oracle shares have risen 50% in 2024 after Monday’s boffo earnings report. That increase is far more compelling than the rise in shares of Amazon (+17%), Apple (+18%), Google (+7%), and Microsoft (+9%).The rise in Oracle stock can be explained by the company’s expectations-beating performance — most notably in the latest quarter. But analysts expect that growth to continue at least through 2026.<figure class="image image_resized" style="width:100%;"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/960x0_0d4f1a2ac5.webp" alt="960x0.webp"></figure>Ironically, Oracle is benefiting now from missing out on creating its own cloud services business when AWS and its peers latched on to that growth opportunity more than a decade ago, according to the Wall Street Journal.AWS, Microsoft, and Google are choosing Oracle — due to its neutrality — to run the data centers they use for training the large language models that drive AI chatbots, notes the Journal.Sadly for Oracle, once LLMs are trained, there is no significant need to retrain them. Unless Oracle can repurpose its data centers for responding to user queries, known as inferencing, Oracle’s growth may slow down.After that, unfavorable growth comparisons could send the company’s stock into neutral. Larry Ellison, Oracle’s co-founder, chairman and chief technology officer, does not agree — he sees no end in sight.Oracle’s Latest Earning Beat Expectations Oracle beat expectations and raised guidance in its August quarter. Oracle also said it will bring database services to cloud infrastructure market leader Amazon Web Services, noted CNBC.While Oracle shares traded at about $140 before the earnings release — up 34% for the year compared to the S&amp;P 500’s 15% gain, the company’s stock rose nearly 12% to a record high of about $157 on September 10.Here are the key numbers:Fiscal Year Q1 2025 revenue: $13.31 billion — up 8% and $80 million ahead of London Stock Exchange Group expectations. Fiscal Year Q1 2025 adjusted earnings per share: $1.39 — seven cents higher than LSEG estimates. Fiscal Year Q1 2025 net income: $2.93 billion — up 21% from the same quarter a year ago. Fiscal Year Q2 2025 revenue growth: In the range of 8% to 10%, according to Oracle CEO Safra Catz — the midpoint of which matched LSEG expectations. Fiscal Year Q2 2025 adjusted earnings per share: In the range of 1.45 to $1.49 — the midpoint of which matched analyst expectations.Why Oracle Is Growing Oracle’s fastest growth comes within the company’s cloud services and license support business which generated $10.52 billion in revenue — a 10% increase from the previous year and $50 million more than the StreetAccount consensus, noted CNBC.The most eye-popping growth came from Oracle’s cloud infrastructure which rose 45% to $2.2 billion — an acceleration from the previous quarter’s 42% increase, CNBC reported.Cloud infrastructure sales jumped 49%, 52% and 66% in the prior quarters, thanks to Oracle’s “winning cloud-computing contracts from AI-focused startups,” noted Investor’s Business Daily.Oracle is seeing “huge demand” from customers who want to use multiple cloud providers, Ellison said in a news release.“To meet this demand and give customers the choice and flexibility they want, Amazon and Oracle are seamlessly connecting AWS services with the very latest Oracle Database technology, including the Oracle Autonomous Database,” he added.Large cloud services providers — such as AWS, Microsoft, and Google; as well as xAI and Nvidia — all derive comfort from Oracle’s decision not to develop its own large AI models that compete with potential clients, the Journal reported.Meanwhile Oracle says it is currently designing a data center that will use over a gigawatt of power— relying on three modular nuclear reactors. Over time, Oracle might operate 2,000 data centers, up from 162 today, said Ellison on the earnings call.In a separate statement on Monday, Oracle said it would partner with cloud infrastructure market leader AWS to enable its database services on dedicated hardware.Can Oracle Sustain Expectations-Beating Growth? Analysts appear bullish on Oracle stock. One reason is the 53% growth in Oracle's contracted work — called remaining performance obligations — to $99 billion.“The RPO growth shows the strong momentum for Oracle Cloud and the Oracle AI story,” Barclays analyst Ramo Lenschow said in a client note featured by IBD.“This large bookings number should give investors confidence that Oracle can accelerate revenue this year and next and makes the (fiscal year) 2026 targets even more realistic, in our view,” Lenschow added.Oracle’s AWS partnership is a sign of customers’ loyalty to the company. That could accelerate “more on-premise workloads transition to the cloud,” Evercore ISI analyst Kirk Materne wrote.Between the current fiscal year and 2027, Oracle’s AI revenue could increase from 15% of Oracle’s total cloud revenue “to more than half by 2027,” Dan Morgan, a portfolio manager at Synovus Trust, told IBD.LLM training is one and done, noted the Journal — but Oracle does not buy it. “This business is just growing larger and larger and larger,” Ellison told investors on September 9. “There’s no slowdown or shift coming.”If analysts are correct, Oracle stock has at least a few more years of growth if the company can keep beating expectations and raising guidance.

Oracle shares have risen 50% in 2024 after Monday’s boffo earnings report. That increase is far more compelling than the rise in shares of Amazon (+17%), Apple (+18%), Google (+7%), and Microsoft (+9%).

Oracle Stock Up 50% — But AI Training Is Why To Sell In 2026

NEW YORK, Sept 10 (Reuters) - Growing risks to the U.S. stock rally are spurring demand for portfolio hedging, options markets showed, as investors grapple with U.S. economic uncertainty, shifting Federal Reserve policy and a looming presidential election.<figure class="image image_resized" style="width:96.38%;"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/3_LWTA_5_DW_6_BP_2_XIACCG_35_ZV_4_UVI_2836101407.avif" alt="3LWTA5DW6BP2XIACCG35ZV4UVI.avif"></figure>As the spotlight turns toward Tuesday's high-stakes televised debate between Democrat Kamala Harris and Republican Donald Trump, the Cboe Volatility Index (.VIX), opens new tab is hovering around 20. That compares with a 2024 average of 14.8 for the index, which measures demand for protection against stock swings.The VIX typically rises around 25% between July and November in election years, as investors sharpen their focus on the market implications of candidates' policy proposals, BofA data showed. This year, however, political concerns have coalesced with more pressing catalysts for volatility, such as worries over a potentially softening U.S. economy and uncertainty over how deeply the Fed will need to cut interest rates, investors said. The S&amp;P 500 notched its worst weekly percentage loss since March 2023 last week after a second-straight underwhelming jobs report, though the index is still up nearly 15% this year."This is an uncertain market," said Matt Thompson, co-portfolio manager at Little Harbor Advisors. "The market is essentially saying, we know risk is elevated, but ... we don't know what the problem is going to be." With volatility already elevated, the "election bump" in October VIX futures, which also encompass the Nov. 5 vote, is far smaller than in previous years. On Tuesday they traded at 19.55, less than 1 point above the September contracts. Moreover, the gap between the contracts with the highest and lowest volatilities is barely above 1 volatility point.In the 2020 and 2016 election cycles, the futures curve presented a 7.3 and 3.4 point gap, respectively, between the months with the highest and lowest volatility, a Reuters analysis of LSEG data showed. SPEED BUMPS AHEAD? The VIX has been in sharper-than-usual focus for investors in recent weeks after the index posted its largest ever one-day spike on Aug. 5, during a sharp market sell-off spurred by economic worries and an unwinding of the global yen carry trade.Though volatility took only days to subside, the index has crept up again as markets have grown choppy again in recent days. Societe Generale analysts advised investors on Monday to stay hedged for the next three to six months, warning of possible volatility from unpleasant economic surprises and geopolitical factors such as U.S. elections and conflict in the Middle East and Ukraine. Others, however, see reasons why investors are less nervous about election risks this time around. Stocks have done well under both Trump and President Joe Biden, noted Seth Hickle, managing partner at Mindset Wealth Management. With Harris' policies seen as sticking close to Biden's, either candidate's victory does not present a major challenge to investors. "We don't really have a whole lot of uncertainty when it comes to what's going to change. I don't think it really spooks the market because we have already been through it," Hickle said. Still, Tuesday's debate has the potential to jolt markets. "Since the last presidential debate literally ended in a brand-new Democratic candidate, I do expect this to be somewhat volatility generating," Amy Wu Silverman, head of derivatives strategy at RBC Capital Markets, said in a note.&nbsp;

NEW YORK, Sept 10 (Reuters) - Growing risks to the U.S. stock rally are spurring demand for portfolio hedging, options markets showed, as investors grapple with U.S. economic uncertainty, shifting Federal Reserve policy and a looming presidential election.

US election is just one risk among many for nervous stock market

Market

The Federal Reserve is widely expected to cut interest rates for the first time in four years Wednesday and outline the path for future rate cuts.Investors have been hoping for a larger half-percentage-point cut versus a quarter-point cut. Traders, in recent days, have increased their wager that the central bank will cut by a deeper 50 basis points. Wednesday morning, Fed funds futures were pricing in a better than 60% chance the Fed cuts by 50 basis points, up from just 15% odds a week ago.“The Fed cutting by 50 basis points is a real possibility,” said Wilmer Stith, bond trader for Wilmington Trust, who just last week thought it was more likely the central bank could cut by 25 basis points. He’s on the fence, though, as to whether it actually happens.Ahead of the blackout period, which started Sept. 7, comments from Fed officials indicated they are more likely to trim their benchmark interest rate by a quarter percentage point. That would mean a new range of 5.0-5.25% from its 23-year high of 5.25% to 5.5% when their policy meeting concludes this afternoon.<figure class="image"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/1_94d857c1b7.webp" alt="1.webp"></figure>Either way, the Fed’s actions will officially mark the termination of the most aggressive inflation-fighting campaign since the 1980s. The rate cut will mark the first in a series of cuts, with intense focus on the Fed’s new interest rate projections, known as the so-called dot plot, for how many rate cuts officials see for the remainder of this year and next.<h2 style="margin-left:0;">Rate debate</h2>JPMorgan chief economist Michael Feroli is one who believes the Fed needs to cut by a bigger amount.“What the Fed should do is clear: Recalibrate the policy rate 50 basis points lower to adjust for the shifting balance of risks,” said Feroli.As inflation has continued a slow downward descent, officials are turning more attention to the job market, which has weakened, with Fed Chair Jay Powell pledging to do everything to maintain a strong job market.Feroli sees a 50 basis point cut Wednesday, with guidance for two 25 basis point cuts at the last two meetings of the year.But former Kansas City Fed president Esther George expects a quarter-point cut with the potential for Powell to lay the groundwork for deeper cuts in subsequent meetings.Who's right? We'll see, of course. But it could take a lot to form a consensus around the FOMC table to vote unanimously for a 50 basis point cut.Some of the committee members, including Fed governor Michelle Bowman, Atlanta Fed president Raphael Bostic, and Philadelphia Fed president Patrick Harker, had indicated that starting with 25 basis points made sense and they weren’t alarmed by the cooling in the labor market.In contrast, in Jackson Hole in late August, Powell struck a dovish stance with comments that indicated he could be in favor of a 50 basis point cut, saying the Fed “will do everything we can to support a strong labor market as we make further progress toward price stability.” He noted that the Fed does not "seek or welcome further cooling in labor market conditions" and that the current level of the policy rate gives the Fed “ample room” to lower rates in response to any weakening in the job market.<figure class="image"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/2_a377d98cbe.webp" alt="2.webp"></figure>In any case, Powell will have to explain the interest rate decision and projections in the press conference following the meeting. He'll either set expectations for deeper, more aggressive cuts or say the Fed is expected to take a measured, gradual approach and is prepared to take more aggressive action if warranted.Lots of changes to the language in the Fed’s policy statement are also expected to reflect the Fed’s decision to start a rate cutting cycle, including that officials have gained confidence inflation is falling sustainably to their 2% target, that officials are more focused on weakness in the labor market now, and that the timing and size of future cuts will depend on the data.In addition to their policy decision and interest rate projections, Fed officials will also release forecasts for unemployment, inflation, and the economic outlook. Fed Chair Powell will hold a press conference at 2:30 p.m. ET.

The Federal Reserve is widely expected to cut interest rates for the first time in four years Wednesday and outline the path for future rate cuts.

Fed officials set to cut rates for the first time in 4 years

The U.S. Secret Service said on Monday it was aware of a post by billionaire Elon Musk on the X social media platform musing about an absence of assassination attempts on President Joe Biden and Vice President Kamala Harris.Musk, who owns the platform, formerly known as Twitter, put up the post after a man suspected of planning to assassinate Republican former President Donald Trump at his golf course in West Palm Beach was arrested on Sunday.<figure class="image"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/1_76f7a48b88.jpg" alt="1.jpg"></figure>A Trump supporter and the CEO of Tesla, Musk wrote on Sunday: "And no one is even trying to assassinate Biden/Kamala," a post he ended with an emoji of a face with a raised eyebrow.He was quickly criticized by X users from the left and right, who said they were concerned his words to nearly 200 million followers could incite violence against Biden and Harris.Musk deleted the post but the Secret Service, tasked with protecting current and former presidents, vice presidents and other notable officials, took notice."The Secret Service is aware of the social media post made by Elon Musk and as a matter of practice, we do not comment on matters involving protective intelligence," a spokesperson told Reuters in an email. "We can say, however, that the Secret Service investigates all threats related to our protectees."The spokesperson declined to specify whether the agency had reached out to Musk, who seemed to suggest in follow-up posts that he had been making a joke."Well, one lesson I've learned is that just because I say something to a group and they laugh doesn't mean it's going to be all that hilarious as a post on X," he wrote. "Turns out that jokes are WAY less funny if people don't know the context and the delivery is plain text."Harris, a Democrat running against Trump in the Nov. 5 presidential election, issued a statement on Sunday night as did Biden expressing relief and gratitude that Trump had not been harmed and condemning political violence.The White House criticized Musk for his post."Violence should only be condemned, never encouraged or joked about. This rhetoric is irresponsible," White House spokesperson Andrew Bates said on Monday. &nbsp;

The U.S. Secret Service said on Monday it was aware of a post by billionaire Elon Musk on the X social media platform musing about an absence of assassination attempts on President Joe Biden and Vice President Kamala Harris.

US Secret Service says it is aware of Musk post about Biden, Harris

<h2 style="text-align:justify;">Goldman Sachs Group (GS) Company Description:</h2>Founded in 1869, Goldman Sachs Group, Inc. is a leading global investment banking, securities, and investment management firm. The company provides a range of financial services to clients including corporations, financial institutions, governments and individuals. The company operates through four segments: Investment Banking, Global Markets, Asset Management, and Consumer &amp; Wealth Management.<figure class="image"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/pic_1_1_493c512ecb.png" alt="pic 1"></figure><h2 style="text-align:justify;">Analyst’s ratings</h2>Morgan Stanley analyst Betsy Graseck maintained a Buy rating on Goldman Sachs Group (GS – Research Report) today and set a price target of $553.00. The company’s shares closed last Friday at $478.99.Graseck covers the Financial sector, focusing on stocks such as Goldman Sachs Group, Bank of New York Mellon Corporation, and Citigroup. According to TipRanks, Graseck has an average return of 3.1% and a 46.77% success rate on recommended stocks.Goldman Sachs Group has an analyst consensus of Strong Buy, with a price target consensus of $531.13, implying a 10.89% upside from current levels. In a report released on September 10, KBW also maintained a Buy rating on the stock with a $530.00 price target.The company has a one-year high of $517.26 and a one-year low of $289.36. Currently, Goldman Sachs Group has an average volume of 2.21M.<h2 style="text-align:justify;">Is GS a Buy Right Now?</h2>Analysts remain bullish about GS stock, with a Strong Buy consensus rating based on 13 Buys and four Holds. Over the past year, GS has surged by more than 40%, and the average GS price target of $531.69 implies an upside potential of 12.8% from current levels.<figure class="image"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/pic_2_1_6aaff8e96b.png" alt="pic 2"></figure>tipranks

Goldman Sachs Group (GS) Company Description:

Goldman Sachs Group (GS) Gets a Buy from Morgan Stanley

In their bids to win the 2024 election, former President Donald Trump has promised to "drill, baby, drill" to lower energy prices, while Vice President Kamala Harris has assured she won’t ban fracking.Those promises may not matter much in the near term. Energy prices are poised to drop, regardless of who wins, says one industry watcher.“Whoever gets elected in November is going to be very fortunate in that they are going to be dealing with some of the most serious energy deflation ... since 2020,” Tom Kloza, OPIS Global head of energy analysis, told Yahoo Finance, referring to the start of the pandemic lockdowns four years ago when US crude prices slumped as travel demand collapsed.<img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/Screenshot_2024_09_16_at_20_05_55_34435265de.png" alt="Screenshot 2024-09-16 at 20.05.55.png">The past week was one of the year's most volatile for the energy markets as oil touched its lowest level since 2021 before ticking higher on Wednesday. Year to date, West Texas Intermediate (CL=F) is down about 2%, while Brent (BZ=F), the international benchmark, is down more than 4%.Gasoline prices have also fallen to their lowest level since February, with the national average at $3.24 per gallon, according to AAA.Prices are expected to go lower as the industry soon switches to a cheaper winter-grade gasoline. Analysts predict the national average will dip below $3 per gallon in the coming weeks barring an unforeseen event."These sub-$3 prices are sure to boost consumer sentiment going into the fall,” GasBuddy head of petroleum analysis Patrick De Haan told Yahoo Finance.Weak demand out of China, the biggest importer of oil, has been the main driver of declining crude prices. The country has been battling a housing crisis while shifting toward electric vehicles and more natural gas consumption.Cracks in the US economy and in Europe have also weighed on the markets, keeping some speculators notably at bay.“What happened this summer and what continues to happen is that you do not have speculators buying futures and options contracts anymore,” said Kloza. “The fact that we didn’t see more speculative money coming into the market … that might represent a real sea change for oil.”"Right now, financial participation in oil markets is probably as low as it’s been since oil became an asset class,” said Kloza.<figure class="image"><img src="https://infofinance-prod.s3.ap-southeast-1.amazonaws.com/b9ecfe70_6e8f_11ef_abf8_cdbd79f1bae3_39d997ec3b.webp" alt="b9ecfe70-6e8f-11ef-abf8-cdbd79f1bae3.webp"></figure>The fall in oil prices has been so rapid that Wall Street analysts have been forced to revise down their forecasts. On Monday, Morgan Stanley cut its Brent price target for the second time in a matter of weeks, citing risks of "considerable demand weakness."The analysts forecast Brent will average $75 per barrel in the fourth quarter of this year, $5 lower than the prior downwardly revised outlook of $80 issued in late August.Oil demand growth forecasts have also come down. The International Energy Agency cut its outlook for 2024, citing Chinese oil demand "firmly in contraction."The revision came the same week oil alliance OPEC slightly trimmed its own oil demand forecast. Despite the revision, OPEC's expectations are still near double other industry estimates.The oil alliance spearheaded by Saudi Arabia has been eager to bring back more of its supply by unwinding some of its production cuts, which have helped keep a floor on prices.However, the cartel recently delayed the reintroduction of barrels initially slated for October given the slump in oil. The postponement didn’t do much to boost prices.“OPEC+ still has a significant amount of oil that is just waiting to return to the market. And I think that’s the concern — is there really that demand to really satisfy and absorb that increased oil that is going to come back to the market sometime soon?” Tortoise senior portfolio manager Rob Thummel told Yahoo Finance on Wednesday.In a nod to centrists, during Tuesday's event Harris underscored record production in the US, the largest oil and gas producer in the world."We have invested a trillion dollars in a clean energy economy while we have also increased domestic gas production to historic levels," said Harris.Meanwhile, at rallies, Trump has promised to produce even more oil in order to cut energy prices in half and bring gasoline below $2 per gallon, though analysts expect producers to keep his "drill, baby, drill" vow in check if prices go too low.On average, companies need the price of US crude to be at least $64 per barrel in order to profitably drill a new well, and $39 for existing ones, according to the Dallas Federal Reserve survey.With WTI trading near $69, production is expected to continue growing amid technological breakthroughs. The US reached peak production last year despite declining US drilling activity because new wells are more efficient, according to government data. US oil production next year is expected to reach another record level, given advances in horizontal drilling and fracking."Ukraine war, the COVID lockdowns, those are the things that shaped oil prices in the last four years," said OPIS's Kloza."The more likely thing is that we’re going to see much more modest prices next year, and we'll see oil trade in [on] a lot quieter terms than we have for the last three years," he added.

In their bids to win the 2024 election, former President Donald Trump has promised to "drill, baby, drill" to lower energy prices, while Vice President Kamala Harris has assured she won’t ban fracking.

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US election is just one risk among many for nervous stock market

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