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Shares of Apple surged 6% on Friday as investors cheered better-than-expected fiscal second-quarter results and the announcement of the biggest stock buyback program in U.S. corporate history. In theory, Apple's $110 billion stock buyback program should provide a boost to its share price. However, recent history shows that spending billions on share repurchases isn't guaranteed to make the stock a runaway winner. So they've been retiring these shares," Nathan said. AAPL YTD mountain Shares of Apple are still down year to date despite Friday's bounce.
Persons: Dan Nathan, they've, Nathan, hasn't, They've, Apple isn't Organizations: Apple, RiskReversal Advisors, CNBC, Big Tech, Nasdaq, Mobile
According to Stifel's Barry Bannister, the market is on a road to nowhere for almost the next decade. "Easy money is behind us, the hard money is now," the firm's chief equity strategist told CNBC's "Fast Money" this week. The price earnings multiple comes down." But it's a strategy "Fast Money" trader Dan Nathan questions during a sluggish market. "I do not think you want to be overweight small caps right here," said RiskReversal Advisors principal Dan Nathan.
In the first quarter of 2023, the S & P 500 is up more than 3%. .SPX YTD mountain S & P 500 YTD However, the "Fast Money" traders said investors are failing to price in tightening credit conditions, as well as a weaker macro environment, ahead of first quarter earnings — particularly in the tech sector. Nathan said consensus estimates for tech stocks are elevated, even as those companies contend with a higher interest rate and inflationary environment. Similarly, investors piled into mega-cap tech stocks after the recent banking crisis, citing their "stability," Grasso said. Trader Karen Finerman was less negative on the sector, saying supply chain issues and a pullback in the stronger dollar have eased this year, weighing less on mega-cap tech stocks.
Those worries eased Tuesday following comments from Treasury Secretary Janet Yellen saying the government will step in if needed to guard the banking sector against further crises. Regional bank stocks surged, and all three of the major indexes notched their second consecutive day of gains. Regardless, "Fast Money" traders were skeptical of the rally, noting the Fed will have to navigate battling higher inflation against a weaker economic outlook. The S & P 500 seems to be trading as if the shakeup in the banking sector "never happened," said Guy Adami of Private Advisor Group. "Because I will tell you, as much as you think these bank problems are over, I don't necessarily think they are."
Palantir Technologies is a promising trade for the first time in a while, according to Private Advisor Group's Guy Adami. Analysts called for earnings of 3 cents per share on revenues of $502 million, according to Refinitiv. It also marked the company's first quarter of positive net income on a generally accepted accounting principles (GAAP) basis. "In an environment where what they're working on is seemingly front and center in everybody's lexicon — I think Palantir for the first time in a long time, is actually tradeable," Adami said Monday on CNBC's " Fast Money ." Adami added that he could see Palantir becoming "an M & A play."
On Monday, Alphabet's Google announced a new conversational AI technology it will open up to public testing, called Bard, which would rival ChatGPT. "This is a company that went public in late 2021," Nathan said on CNBC's " Fast Money " Monday night. "If we start seeing companies put .ai at the end of the company [name], we've been through that, we know what happens here," he added. "A lot of times if a company is saying they have superior AI, that could be a warning sign." The size and the quality of the data set an AI service uses is one of the best predictors of success, he added.
Big Tech stocks Amazon , Apple and Alphabet reported earnings Thursday night. "Ultimately, I think that this was a dodged bullet," Munster said on CNBC's " Fast Money ." "Apple is probably best positioned of the three to exceed the March quarter," Munster said. The company beat revenue expectations for the quarter , according to Refinitiv, but reported its slowest year of growth in its time as a public company. "When we look at the three tonight, Google was the one that had the highest growth rate relative to expectations," Munster said.
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