12 Veeva 的生命科学 AI 工具可能将其股价推高 30% DAN VICTOR 14 投资者如何被 Broadstreet 私募股权基金坑害 BILL ALPERT 16 AI 辅助交易未来的抢先预览 ANDREW WELSCH 26 问答:来自富达投资 (Fidelity) Ben Shuleva 的顶级消费股 EVIE LIU
集中型基金的收益波动较大,因此最好将其与指数基金搭配使用。 基金 / 代码 | 晨星分类 持股数量 1年回报率 5年回报率 10年回报率 15年回报率 费用率 5年波动率 | Alger Concentrated Equity / CNEQ 大盘成长 30 17.8% N / A N / A N / A 0.56% N / A Alger Focus Equity / ALAFX 大盘成长 42 18.4 19.3% 21.7% N / A 0.99 23.…
Could the use of GLP-1 weight-loss treatments hurt food-and-beverage demand long term? I have described the potential disruption from GLP-1s as both big and
You have cited the structural challenges facing the packaged-food industry. Yet, Mondelez International has been a top holding. What separates it from peers? Mondelez competes in more-indul-
"Since World War II, the pre-election year (2027) has been the strongest of the four years [of the presidential cycle], on average. The S&P 500, including dividends, hasn't experienced a negative pre-election year since the 1930s." –Bryan, Michael, and Ronald Sadoff, Wealth Enhancement
Coming U.S. Auctions | <td rowspan="2">Monday | <td rowspan="2"> | <td colspan="2">Yields (%) | When Issued* | Last Auction | $95.0 bil | 3-month | 4.069 | 4.110 | $82.0 bil | 6-month | 4.269 | 4.285 | Tuesday | $58.0 bil | 3-year | 4.906 | 4.474 | <td colspan="4">* As of Friday afternoon. | SEC Form 144 must be filed by holders of restricted securities (also called letter stock) who intend to sell shares. Shares Indicated: the number to be sold. Sales Date: the approximate date of the sale. (Sometimes shares aren't sold, even though their owner has filed a Form144.) Source: LSEG Data and Analytics | Company | Sym | Shares Indicated | $ Value | Sale Date | Seller | Title | Kodiak Ai | KDK | 3,250,000 | 9,035,000 | 9/25/26 | Wendel, Andreas | AF | Sinclair | SBGI | 298,808 | 3,845,659 | 9/24/26 | Smith, Frederick | D | Coreweave | CRWV | 200,000 | 17,014,000 | 9/29/26 | Intrator, Michael | H | Roivant Sciences Ltd | ROIV | 200,000 | 7,323,556 | 9/30/26 | Venker, Eric | O | Coca-Cola | KO | 184,117 | 16,167,314 | 9/28/26 | Mann, Jennifer | O | Atlanta Braves | BATRK | 175,395 | 9,460,806 | 9/30/26 | Schiller, Derek | O | Pagerduty | PD | 172,500 | 2,578,875 | 9/30/26 | Tejada, Jennifer | OD | Alto Neuroscience | ANRO | 134,886 | 3,596,061 | 9/29/26 | Smith, Nicholas | O | Cerebras Systems | CBRS | 120,000 | 24,769,200 | 9/25/26 | Lie, Sean | O | Vornado Realty Trust | VNO | 90,000 | 3,074,400 | 9/25/26 | Chera, Haim | O | ---
Weekly Bond Statistics | New Offerings, (mil $) (v) | Last Week | Prev. Week | Yr Ago | Corporate (z) | 11,115 | r42,437 | 12,925 | Municipal (z) | 4,971 | r11,225 | 9,704 | <td colspan="4">(Barron's index of 10 high-grade corporate bonds.) | 5.44 | 5.33 | 4.27 | <td colspan="3">(Barron's index of 10 medium-grade corporate bonds.) | 6.09 | 5.95 | (High-grade index divided by intermediate-grade index; decline in latter vs. former generally indicates rising confidence, pointing to higher stocks.)
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The weakening among stocks outside a golden circle of market leaders isn't the bad omen you might think. Indeed, this could be the setup for a year-end rally.
10 Stocks to Buy for Quantum Computing's Next Phase MACKENZIE TATANANNI
12 Veeva's AI Tools for Life Sciences Could Boost Its Stock 30% DAN VICTOR
14 How Investors Got Burned by the Broadstreet Private-Equity Fund BILL ALPERT
16 A Sneak Peek Into the Future of AI-Assisted Trading ANDREW WELSCH
26 Q&A: Top Consumer Stocks From Fidelity's Ben Shuleva EVIE LIU
54 Other Voices: What's to Blame for Capitalism's Unpopularity CLIFFORD WINSTON
LEWIS BRAHAM
Funds Quarterly: Have It All With a ‘Core and Explore’ Approach
Rounding out your indexed investments with well-managed focused funds can help protect your portfolio from steep losses and goose your gains. Plus: the quarter’s winners and losers.
COLUMNS
7 ANDY SERWER – UP & DOWN WALL STREET
8 JACK HOUGH – STREETWISE
13 ANDREW BARY – INCOME INVESTING
25 RANDALL W. FORSYTH – THE ECONOMY
28 ADAM LEVINE – TECH TRADER
29 PAUL R. LA MONICA – THE TRADER
32 CRAIG MELLOW – INTERNATIONAL
33 STEVEN M. SEARS – STRIKING PRICE
55 ELIZABETH O'BRIEN – RETIREMENT
DEPARTMENTS
6 INDEX OF COMPANIES
9 REVIEW & PREVIEW
34 INSIDE SCOOP, 13DS
35 WINNERS & LOSERS
36 MARKET VIEW
55 MAILBAG
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作为 AI 狂热的代表,英伟达(Nvidia)自 2022 年 11 月 30 日 ChatGPT 发布以来已上涨 1,249%——即便 AI 模型已无数次失控。尽管如此,华尔街仍在向这些企业投入资金。这一切都应该让我们停下来思考。
但事实并非如此,近期出现的一种反常现象证明了这一点:唐纳德·特朗普总统对 AI 的反对者不屑一顾,而 AI 公司的首席执行官们却几乎在恳求联邦政府的监管。上周 Big Tech 在白宫举行的大规模会议,除了达成一项“具有道德约束力”的协议,以及总统称 AI “将会非常、非常安全”之外,结果基本上就是一次拍照机会,让人想起苏联时代的阅兵看台,甚至还配有一张由总统发布的座位表。
大多数美国人认为我们需要更多措施。在《华尔街日报》的一项新民调中,超过一半的受访者希望 AI 拥有保障措施,近三分之二的人希望暂停该技术的发展。
“我特别担心 [AI 公司] 推行那种认为它们可以自我监管的想法,”诺贝尔物理学奖得主杰弗里·辛顿(Geoffrey Hinton)表示。他曾在谷歌母公司 Alphabet 工作十年,被誉为 AI 之父。“没有人认为药企应该被允许自我监管。FDA 强制要求他们在药物上市前证明其安全性。至少,我们应该为 AI 建立类似的机制。”
尽管近期有许多来自 AI 公司的异见者辞职以示抗议,但早在多年前,硅谷的一些人就对技术失控保持警惕,例如 Meta Platforms(Facebook 母公司)的弗朗西斯·豪根(Frances Haugen),以及 Alphabet 的特里斯坦·哈里斯(Tristan Harris)、蒂姆尼特·格布鲁(Timnit Gebru)和辛顿。
最早且最激进地转向警惕技术的科技精英之一是 Silver Lake 和 Elevation Partners 的联合创始人罗杰·麦克纳米,他曾与风险投资公司 Kleiner Perkins 以及 Meta 首席执行官马克·扎克伯格(Mark Zuckerberg)密切合作。麦克纳米在十年前开始反思自己的立场,并在 2019 年出版的《Zucked: Waking Up to the Facebook Catastrophe》一书中对社交媒体提出了最尖锐的警告。诚然,Meta 的股价自那时起上涨了 300% 以上,但麦克纳米指出的是社会危害,他认为这种危害并未减轻。(麦克纳米是一部关于 Facebook 的新电影《The Social Reckoning》的执行制片人,比尔·伯尔在片中饰演一个大致基于他原型的角色。)
麦克纳米现在将注意力转向了 AI 业务,他认为这是一种“平衡在针尖上”的谵妄状态:“这个‘针尖’就是这样一种观念:人们将广泛部署 AI,他们将为此支付巨额资金,且公司能够降低成本结构,从而产生足够的现金流来偿还债务,”他说。“这其中包含太多的依赖条件。”
F Fidelity Select Consumr Discrety Portfolio .. 26
Fidelity Select Consumer Staples Portfolio . 26
Fidelity Wise Origin Bitcoin ..... 30
G GameStop ..... 34
General Mills ..... 26
GMO Quality ..... 21
GMO US Quality ..... 21
Grayscale Ethereum Staking ..... 30
Group 1 Automotive ..... 34
H Hut 8 ..... 30
I IBM ..... 10
Infleqtion ..... 11
Interactive Brokers Group ..... 16
Invesco Russell 1000 Equal Weight ..... 21
IonQ ..... 10
iShares 20+ Year Treasury Bond ..... 13,55
iShares Bitcoin Trust ..... 24,30
iShares Core S&P Small-Cap ..... 24
iShares MBS ..... 24
iShares Semiconductor ..... 31
iShares Treasury 20+ Year Treasury Bond .. 13
Our index lists significant companies mentioned in stories and columns, plus Research Reports, and Corrections & Amplifications. The references are to the first page of the item in which the company is mentioned.
K Keurig Dr Pepper....27
Kinetik Holdings....34
Kioxia Holdings....31
Kurv Memory Select....31
L Levi Strauss....29
Lumentum Holdings....23
M Marriott International....27
Marvell Technology....23
Merck....24
J Janus Henderson AAA CLO....55
JetBlue Airways....18
Johnson & Johnson....21,24
JPMorgan Equity Focus....21
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信任在这里至关重要。苹果公司拥有极高的信任度,因为它通过对其产品收取高价来赚钱,而不是通过销售客户信息。它拥有自己的支付通道 Apple Pay,但 Siri 并不是一个持久性智能体,甚至算不上一个成熟的聊天机器人。苹果公司在人工智能方面的王牌本应是任务将越来越多地在 iPhone 等本地或“边缘”设备上运行,但目前尚不清楚如今的手机在具备彻夜执行持久性智能体职责的能力方面准备得如何。
Meta 的信任度较低。但它拥有先发优势,并且非常擅长处理那些没有客户费用的服务如何以及在哪里获利。这一点也很重要:巴克莱银行(Barclays)估计,托管一个持久性智能体用户的成本约为每月 $4,是聊天机器人用户成本的 10 倍。Amazon.com 已禁止 Muse 作为购物者进入,理由是如果有人应该因为引导客户而获得报酬,那么这个对象应该是商店。
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The New Math of AI: Are Those Trillion-Dollar Numbers Real?
W
Anthropic's IPO is “completely ludicrous” and “the triumph of Wall Street fees over critical thinking,” says Roger McNamee.
e have offi-
cially en-
tered the era
of trillion-
dollar math
that doesn't
add up.
On Wednesday, the U.S. military pulled up its tents and left Iraq after more than 23 years, 4,418 U.S. deaths, and \$1.7 trillion in spending.
This past week we also learned from Anthropic's long-anticipated initial-public-offering prospectus that the artificial-intelligence colossus is eyeing a \$2 trillion valuation. Add to that a new Brookings paper, which says the AI infrastructure buildout will total \$10.3 trillion from 2025 to 2032.
All mind-blowing numbers. But is any of this worth it? (Especially the thousands lost in Iraq, which puts the rest in perspective.) It would be hard to deny that AI mania has us, Icarus-like, flying too close to the sun.
Nvidia, the poster child of AI exuberance, is up 1,249% since ChatGPT was launched on Nov. 30, 2022—even as AI models have gone rogue countless times. And still, Wall Street is shoveling money into these enterprises. All of which should give us pause.
But it hasn't, evident in light of the recent man-bites-doggery in which President Donald Trump pooh-poohs AI naysayers while AI CEOs practically beg for federal oversight. Mostly what came out of Big Tech's big sit-down at the White House this past week, besides a “morally binding” agreement and the president saying AI is “going to be very, very safe,” was a photo op reminiscent of a Soviet-era
BY ANDY
SERWER
parade reviewing stand, replete with a POTUS-posted seating chart.
A majority of Americans think we need more. In a new poll, over half of those surveyed by The Wall Street Journal want safeguards on AI, and nearly two-thirds want a pause in the development of the technology.
"I'm particularly concerned about [AI companies] pushing the idea that they can regulate themselves," says Geoffrey Hinton, a Nobel laureate in physics who worked at Google parent Alphabet for a decade and has been called the godfather of AI. "Nobody thinks drug companies should be allowed to regulate themselves. The FDA forces them to prove their drugs are safe before their release. At the very least, we should have something like that for AI."
Though a number of dissenters from
AI companies have resigned in protest recently, some from Silicon Valley were wary of tech running amok years earlier, such as Frances Haugen of Facebook parent Meta Platforms, and Tristan Harris, Timnit Gebru, and Hinton of Alphabet.
One of the first and loudest of the technorati to turn techwary was Roger McNamee, co-founder of Silver Lake
and Elevation Partners, who worked closely with venture firm Kleiner Perkins and Meta CEO Mark Zuckerberg. McNamee began biting the hand that fed him a decade ago, warning about social media most pointedly in his book Zucked: Waking Up to the Facebook Catastrophe, published in 2019. True, Meta's stock has risen over $300\%$ since then, but McNamee was calling out societal harm, which he argues hasn't diminished. (McNamee is an executive producer of a new movie about Facebook, The Social Reckoning, in which Bill Burr plays a character loosely based on him.)
McNamee has turned his attention to the business of AI, which he seems to think is a kind of delirium “balanced on the head of a pin”: “The pin is this notion that people are going to deploy AI widely, they’re going to pay a ton of money for it, and that companies are going to get the cost structure down so it generates enough cash flow to service their debt,” he says. “That’s a lot of dependencies."
Anthropic's IPO is “completely ludicrous” and “the triumph of Wall Street fees over critical thinking,” he says. “Remember, there are 10 other companies selling this stuff. A \$1 trillion or \$2 trillion valuation for a company with this revenue is ridiculous.” (Anthropic’s revenue grew 12-fold in 2025 to nearly \$4.6 billion.)
Ah yes, Anthropic's math. Reuters reports that the company a) lost \$42 billion last year, b) expects to spend \$518 billion on cloud computing and infrastructure obligations in coming years, and c) warns that its business could cause “catastrophic or existential risks to humanity.”
Sheesh. Remember when we thought tobacco companies were the bad guys? More to the point, who in their right mind would dip their beak here? Sure, early investors like former Google CEO Eric Schmidt might like you to buy their pre-IPO Anthropic shares—he bought in May 2021 at a \$461 million valuation, according to PitchBook, which, at a \$2 trillion valuation, would give him a dizzying 4,338-fold gain—but why oblige him? As Barron's recently noted, "Anthropic's IPO looks like a risky bet, at best."
What about the AI bubble writ large? “Ordinarily, you’d have expected the government to intercede. Now you’re counting on the bond market,” says McNamee, referring to the deteriorating credit ratings and bond prices of some AI players such as Oracle, Akamai Technologies, and CoreWeave.
Elevation Partners co-founder Roger McNamee in 2021: He was one of the first and loudest of the technorati to turn tech-wary.
“AI itself is not going to go bust,” says Hinton. “It works, just like railways worked. But everybody thought you could get rich quick by investing in railways, and there was a bust. That often happens with new technologies. Will we see a bust? I don’t think it’s impossible. It is a large fraction of the U.S. stock market now. People are piling in.”
To paraphrase Sen. Everett Dirksen's reputed observation: "A trillion here, a trillion there, and pretty soon you're talking real money."
The money here is real. The math, not so much. B
STREETWISE
Barclays Capital estimates that the prize in today's persistent agent turf war could be \$10 trillion in stock market value, or nearly two Nvidias.
Just in time for Halloween, Wall Street has a new hobgoblin. It's called the persistent agent, and on the scariness scale, it falls somewhere between a wet gremlin and a bond vigilante.
By now you have surely heard of Muse, launched on Sept. 8 by Meta Platforms, the company behind Facebook, Instagram, and creepy bionic eyeglasses. Another early contender is privately held Instinct, whose agent is invitation-only for now. This past Tuesday, ChatGPT owner OpenAI launched an agent called Dots. Anthropic has Claude Cowork, and Alphabet has Gemini Spark. Elon Musk's SpaceX has Grok Bot. Apple has, well, not much but maybe enough—we'll come to that.
Musephobia has helped send shares of Planet Fitness and Sirius XM Holdings down 19% and 13%, respectively, since Sept. 7, on fears that agents will make it easy for busy and distracted consumers to cancel forgotten subscriptions. Airbnb and Booking Holdings are down 13% and 17%, respectively, because Muse can chisel down travel costs through tireless robo-shopping. And Charles Schwab is off 11% because the agent might coax customer balances out of checking accounts paying 0.01%.
So far, there have been more stock tricks than treats, but Meta itself is up $18\%$ since Muse's launch. This past week, a Morgan Stanley travel analyst theorized that winners in Muse-assisted travel will be companies with differentiated goods, relatively
BY JACK
HOUGH
limited shopper attention, and high distribution costs. Cruise lines check all three boxes, and, coincidentally or not, Royal Caribbean Group and Carnival are lately running slightly ahead of the market.
Two new reports are more jarring. One from BofA Securities explores whether Muse is a threat to Apple. Unlikely, it concludes, but the question is more telling than the answer. Why would a month-old app pose problems for a hardware company with 2.5 billion installed devices worldwide? Barclays Capital, meanwhile, wins on financial audacity. It estimates that the prize in today's persistent agent turf war could be \$10 trillion in stock market value. That's nearly two Nvidias.
When the stakes are that high, the fear is rampant, and the technical details are complicated enough to make a cyborg cry in binary, it's time for another installment of my semiregular How to Pretend to Understand series. Past topics have included Brexit and quantum computing. The idea is to quickly arm the layperson with just
enough background on a topic to survive an office conversation about it, lord a couple of facts over less-informed friends, and maybe form some educated investing guesses.
Personable as your favorite chatbot might seem, it doesn't really chat. It converts questions into numbers representing words or word fragments (tokens), then uses a probability engine to determine the next best number to add, again and again, until it finishes its “response” and converts its added numbers back into words. A persistent agent, on the other hand, doesn't simply ask itself which token comes next in the answer, but rather which tool it should use or sub-task it should perform to get closer to an assigned goal.
The “persistent” part means that these agents can keep working even after you’ve logged off and learn about you as they go, like a human assistant. For that, they need their own computing sandbox. Pioneer OpenClaw, launched late last year, can run locally on user machines. Muse uses a virtual machine, or pretend computer made from software running on an actual computer, like a tiny apartment inside a massive building. Agents also use “headless” tools, meaning they can browse websites, fill out forms, place orders, send messages, and even make synthesized voice calls entirely in code, without any of the windows or graphical front ends that humans need to make sense of the internet.
Two other important concepts to consider are connectors and payment rails. Connectors are things like email, calendars, account logins, and other sources of personal information. The more you tell an agent about yourself, the more it can do to (hopefully) help. A Barron's colleague used Muse to find cheap pants and book a toenail-related doctor's appointment, but only by providing his credit-card statement did he find and kill a forgotten subscription. Payment rails allow agents to execute transactions. Muse uses a third-party payment company called Stripe, for customers who've made peace with Mark Zuckerberg snooping through their social media but aren't ready to hand him their credit cards.
Trust is a big deal here. Apple has plenty of it, because it makes money by charging dearly for its wares, not sell-
ing customer information. It has its own payment rail, Apple Pay, but Siri isn't a persistent agent, or even much of a chatbot. Apple's artificial-intelligence trump card was supposed to be that tasks would increasingly run on local or "edge" devices like iPhones, but it's unclear how equipped today's phones are for staying up all night to perform a persistent agent's duties.
Meta has less trust. But it has an early-mover advantage, and an excellent handle on how and where to get paid on services that don't have customer fees. That's important, too: Barclays reckons the cost to host a persistent agent user is around \$4 a month, or 10 times the cost of a chatbot user. Amazon.com has banned Muse as a shopper on the belief that if anyone should get paid to steer customers, it should be the store.
Expect today's agent hopefuls to compete on cost, point of access, third-party application tie-ins, consumer versus commercial use, data sovereignty, and permission—Muse likes to ask before doing things, while Instinct prefers a freer hand.
供应管理协会(Institute for Supply Management)将发布九月份的服务业采购经理人指数(PMI)。共识预期值为 55,略低于八月份。
📄 Original Section
Barron's Streetwise
In a weekly podcast by Barron's, columnist Jack Hough looks at the companies, people, and trends you should be watching. This is Wall Street like you've never heard before. Subscribe to Barron's Streetwise on Spotify, Apple Podcasts, or your favorite listening app.
Barclays says the first agents to lure customers to share connectors hold the advantage, and that Muse and OpenAI Dots are well positioned. BofA says that Apple can eventually win on trust, but that it will be difficult to do so while releasing major software updates only annually, because persistent agents grow more powerful every day. B
It has struggled to release hits that drive viewer engagement and, thus, the stock has suffered: As of Thursday, shares were down 25% for the year, and the stock has declined 37% since closing at a recent high of \$107.79 on April 16.
In Wall Street speak: yuck.
Deutsche Bank analyst Bryan Kraft contends the share price decline is an opportunity. “We believe the current (still very healthy) growth outlook is being undervalued,” he said in a client note.
His firm upgraded Netflix stock to Buy from Hold. Kraft believes that Wall Street's obsession with U.S. engagement overlooks the company's larger total market. Why? International engagement time has increased. This year's first half: U.S. minutes viewed were down 8.6%. The rest of the world: up 5.4%.
“We believe this advantage will allow Netflix to sustain its global leadership position,” Kraft said. “While U.S. viewing trends warrant monitoring...it is important to point out that all programmers experience cyclicality.”
This view isn't universal. HSBC has downgraded Netflix and noted that Alphabet's YouTube is taking viewer share from the streamer.
Yet Deutsche Bank believes the concern is overblown. And while some firms disagree, the majority are keen on Netflix. Per FactSet: 28 Buy ratings and 17 Hold ratings. So, chill. –Kit Norton
September Stocks: The month is typically shaky. How did it compare to Septembers past? The Dow industrials averaged a 1.1% September decline from 1896 through 2025; this year, it took a 4.29% hit. For the S&P 500, it was a 1.1% average decline since 1928 versus -0.45% this year. The Nasdaq? Going back to 1971, it averaged a 0.8% decline. This September: up 1.86%.
AI Angst: OpenAI delayed the release of its GPT-6.1 Astra model. AI agents misbehaved by accessing government websites. Back in D.C., President Trump urged the AI bosses to tone down the gloom. Nobel laureate Paul Krugman joked: "Our technology...can destroy the world, so you'd better invest in our IPO."
No October Surprise? If you were placing bets on Polymarket that the Federal Reserve would raise rates this month, bad news for you. Three Fed officials indicated there was no rush for a pre-Election Day hike. A soft jobs report also assured Wall Street that the Fed will hold off.
Heat Treatment: Speaking of inflation, Northeasterners are facing a particularly chilling forecast: The National Energy Assistance Directors Association says winter's average heating oil bill will be 50% higher.
Oldies Act: What do you do when you have everything? You sue! Former Commerce Secretary Wilbur Ross, 88, and former casino king Steve Wynn, 84, challenged New York's annual pied-à-terre tax in a state court filing.
The Institute for Supply Management releases its Services Purchasing Managers' Index for September. Consensus estimate is for a 55 reading, slightly lower than in August.
The Federal Open Market Committee releases the minutes from its mid-September monetary-policy meeting. At that meeting, the FOMC unanimously voted to raise the federal-funds rate by a quarter of a percentage point, to 3.75% to 4%. With the release of this past week's better-than-expected inflation report and weaker-than-expected jobs report, traders are pricing in a 20% chance that the central bank will raise interest rates at its late-October meeting, down from a 65% chance last week.
The University of Michigan releases its Consumer Sentiment index for October. Economists forecast a 47.7 reading, roughly half a point less than the September data. Consumer sentiment remains in the doldrums.
两兄弟 Joseph 和 Steven Baldassarra 于 2020 年在南卡罗来纳州格林维尔创建了 Broadstreet 私募股权基金。
2022 年,他们聘请律师 David J. Feingold 担任 Broadstreet 的首席执行官。2011 年,他与两名共同被告支付了 $18.800 万 以达成和解(且未承认指控),此前美国联邦贸易委员会(FTC)指控 First Universal 抵押贷款修改业务通过收取数千美元的预付款,却几乎没有减轻客户债务,从而欺骗了负债的房主。
“管理人没有权力用任何它想要的东西(比如一袋石头)来赎回投资者,”SEC 在 9 月的法院文件中表示。“这一切都是一个承诺并支付了其无法负担的回报的基金所导致的自然结果。” B
📄 Original Section
The Hottest Sector After AI Is Having a Moment
Quantum computing is becoming a commercial market. Just look at the wave of public listings this year, especially Quantinuum's landmark IPO.
BY MACKENZIE TATANANNI
As artificial intelligence dominates the headlines, quantum computing is gaining steam. Nowhere is that clearer than in public markets, where Quantinuum's landmark initial public offering and a wave of listings this year signal a shift: Quantum is moving from speculative sci-fi to an early commercial market. Late last month, Microsoft un-
veiled a new research center in Maryland, bringing its technology closer to independent evaluators from the government's Defense Advanced Projects Research Agency. IonQ announced that its latest system would be deployed at Nvidia's quantum research center, bridging classical hardware with quantum processors. And a technical paper claimed that IBM's Nighthawk processor took 19 seconds to complete a task estimated to take a supercomputer 110 years.
"A lot of the industry is still doing ‘toy problems,’ ” says Scott Crowder, IBM’s vice president of quantum adoption. “But the people on the leading edge are no longer doing that.”
Nowhere is that leading edge more apparent than in drug discovery, where quantum systems mirror the complex behavior of electrons and molecules. Amgen, one of the world's largest pharmaceutical companies, has embraced the technology to shorten the drug development timeline. A lead investor in Quantinuum's first major funding round, Amgen also collaborates with players like QuEra.
“I look at quantum the same way I look at other emerging technologies,” says Alan Russell, Amgen’s vice president of research and head of R&D technology. “What does it allow us to do that we couldn’t do before, and where can it meaningfully complement the tools we already have?”
For Amgen, that means tackling high-complexity computational challenges, from making sense of vast, intricate data sets to modeling interactions at the molecular level. Amgen,
like others, is looking for “quantum advantage,” or the point where quantum systems can complete a useful task more efficiently than the best available classical supercomputers. In theory, quantum advantage doesn’t require fully fault-tolerant systems, which detect and correct errors in real time. This milestone remains elusive, as scaling quantum systems makes them increasingly vulnerable to environmental noise.
Today's investments are about exploring capabilities and finding practical applications rather than unlocking immediate efficiencies. "For me, the opportunity isn't necessarily about streamlining operations, but understanding whether it can help us tackle scientific problems that are difficult to solve with today's tools," Russell says.
Enthusiasm is spreading across the healthcare landscape. Five years ago, Cleveland Clinic's quantum program started out of a cafeteria at its main Ohio campus. Launched during the organization's centennial to lay a foundation for the next century of care, the initiative centers on the Discovery
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Accelerator—a partnership with IBM spanning over 60 projects in AI, high-performance computing, and, of course, quantum.
“We had that long-term view, which is what every organization looking at quantum needs to have,” says Dr. Lara Jehi, Cleveland Clinic’s chief research information officer. “Otherwise it will never make sense as an investment.”
Researchers from Cleveland Clinic, IBM, and Japanese research institute Riken were nominated for the prestigious ACM Gordon Bell prize for their work in protein modeling. “The innovation was figuring out how quantum and classical can work together,” Jehi says. “It normalizes it, which in and of itself is a big validation.”
While an early attempt to predict postsurgery cardiac risks proved too complex for current hardware, Jehi sees immense potential in areas such as clinical trial logistics, supply chains, and staff scheduling across sprawling hospital networks.
"When we present quantum purely for drug discovery, we're limiting it to an application that only interests
IBM's quantum cabling and connectors
pharma,” Jehi says. “In reality, it could be applied in any research context across areas we haven’t done a good job of exploring.”
Enthusiasm extends to the federal level, where the Commerce Department unveiled a \$2 billion package in May to accelerate quantum technology. Alongside continuing efforts to secure domestic supply chains, Washington is targeting a 2028 deadline to deploy a “scientifically relevant quantum computer” at a national laboratory.
The push partly stems from security concerns. At the center of the debate is Shor's algorithm, a program capable of factoring large numbers at speeds no classical computer can match. The algorithm has never been used to break real-world encryption, but government partners emphasize that preparation can't wait, even with the timing and nature of the risk still unclear.
Bad actors will inevitably harness quantum power, particularly as cloud access lowers the barrier to entry. Industry giants like Amazon Web Services and Microsoft have created ecosystems that host third-party hardware, allowing developers to experiment with quantum algorithms.
"The quantum threat to our public infrastructure is very severe, very real, and certainly coming," JD Dulny, Booz Allen's quantum lead, tells Barron's. "We don't know what the world's going to look like in the next two to three years. Whenever a change shows up, as you've seen with AI, people are going to do amazing things and they're going to do awful things."
For investors looking to bet on quantum's future, pure-play market leader IonQ continues to draw strong interest, with BofA Securities recently initiating coverage of the stock with a Buy rating, citing strategic technical acquisitions such as its recent purchase of chip maker SkyWater Technology.
Government backing highlights other contenders. Infleqtion leads in defense applications like sensors and atomic clocks, while federal stakes in publicly traded players Rigetti Computing, D-Wave Quantum, and Quantinuum validate their respective hardware approaches. IBM remains a central player, though analysts debate how much quantum growth is already priced into the stock. B
一名投资者给了 AI 智能体每人 500 美元,并给出一个每日指令:尽可能多地赚钱。股票经纪人现在还不必担心……但以后可能得担心。
📄 Original Section
AI Will Transform Medicine. This Stock Stands to Gain.
Veeva Systems controls more than 80% of market share in biopharma customer-relationship management software. Its stock can rally 30%.
BY DAN VICTOR
A
rtificial intelligence is re-writing the rules of medicine, promising to accelerate drug development, optimize clinical trials, and bring lifesaving therapies to market faster.
Veeva Systems is making that transformation happen. The Pleasanton, Calif.-based company develops software for biotechnology and pharmaceutical customers to manage everything from research and development and regulatory submissions to day-to-day commercial operations. Its software was originally built atop Salesforce, but has since expanded to stand-alone applications.
"There is a huge opportunity for industry-specific AI to help life sciences get the right medicines to more patients," Paul Shawah, executive vice president of strategy at Veeva, says in a statement to Barron's.
As AI plays a bigger role in this workflow, Veeva stock looks like a solid bet into 2027. We see shares with a clear path to reclaim and surpass their record high of \$344 set in 2021. Veeva shares, currently trading around \$273, offer more than 30% upside over the next 12 months.
There are several reasons to like the stock. Veeva controls more than 80% of market share in biopharma customer-relationship management, or CRM, software. The company has been profitable for more than a decade, expanding sales tenfold since 2015.
Mawer Investment Management, a Canadian fund manager, began buying shares earlier this year. Analyst Renaud Paquin's bullish case is centered around Veeva's dominant competitive positioning. Healthcare's compliance technicalities, in particular, make it difficult for competitors to create alternatives.
“All the proprietary data ultimately makes Veeva an AI winner,” Paquin says.
That advantage on the front line of evolving workflows is exactly what Veeva aims to monetize next. A major strategic shift for Veeva since 2024 has been its push to migrate its core customer base off Salesforce onto its native Veeva Vault CRM. The multi-year process aimed at breaking free from that dependency is well under way. It allows Veeva to both capture higher margins and gain full control of the underlying architecture and user experience.
The migration has proceeded more smoothly than envisioned, with 14 of the 20 largest global biopharmas already committed to Vault CRM. In the process, Veeva has become the entry point for AI in the industry, with virtual-assistant-type features that boost productivity.
The vision with agentic AI is to go a step further, handling increasingly complex, multistep workflows with far less human involvement. The company's new Falcon platform targets processes that are otherwise time-consuming and employee-intensive.
The goal, Shawah says, is straightforward: “increasing speed and lowering costs.” One early example is medical, legal, and regulatory, or MLR, review of promotional materials. Falcon MLR is available now, with additional agents for clinical, regulatory, and safety work planned for later this year and into 2027. Veeva estimates its tools could eliminate up to 70% of certain manual administrative tasks and potentially accelerate drug timelines by 30% to 90%.
Global spending on task-specific agents is projected to more than double each year through 2029, at a 119% compound annual rate, to more than \$750
Veeva Systems
Cloud-based software for life sciences
Note: E=estimate; Estimates are for the fiscal year ending Jan. 2028.
Sources: Bloomberg, FactSet
Recent Price
\$285.45
52-Week Change
-4.2%
Market Value
\$46.2 B
2028E P/E
27.8
billion, according to Gartner. In many ways, biopharma is a natural fit for the technology, allowing companies to remove operational headaches and focus on what really matters—therapeutic breakthroughs.
In its fiscal second quarter, Veeva delivered revenue of \$928 million, up 18% year over year, and adjusted earnings per share of \$2.35, also up 18%. Strength in the core Vault CRM offering helped the company raise full-year revenue guidance to nearly \$3.7 billion and adjusted EPS to about \$9.21, the third upward revision this year, representing a 14% increase from last year.
Management continues to target a \$6 billion annual revenue run rate by 2030, implying average annual growth of 17.5% over the next three years.
Wells Fargo analyst Stan Berenshteyn is on board. Acknowledging that full monetization of agentic labor will unfold through next year, the adoption potential is high and could gain traction quickly. He rates shares as Overweight, equivalent to Buy, with a price target of \$330.
Veeva Systems aims to help AI with medical applications.
The stock currently trades around 27 times forward earnings—more expensive than the broader market and even Salesforce at 14 times, yet a discount to the company's historical average earnings multiple of 35 times earnings over the past five years. Veeva stock justifies a premium given the company's regulatory moat and high-quality fundamentals, including a balance sheet with zero debt.
It's a compelling story, but risks remain. The continuing transition off Salesforce onto Vault CRM introduces short-term execution variables that could impact near-term growth. Additionally, sentiment toward biotech, and AI in general, can shift quickly, adding volatility to Veeva's share price.
Notably, adding up Veeva's operating margin—which consistently runs above 45%—alongside top-line growth around 15%, the company scores well above the “Rule of 40,” a long-held value-creation benchmark in software. At a time when AI disrupters are struggling to generate consistent free cash flow, Veeva stands out with an underappreciated AI potential.
For now, Veeva offers investors a rare blend of defensive market dominance and aggressive growth upside. At the intersection of healthcare and technology, Veeva is a winner. B
INCOME INVESTING
TIPS could be the most appealing group of Treasuries since they protect investors from what they fear most–higher inflation.
当然,智能体不仅仅是日内交易员。它们还可以被用于设定资产配置和长期投资组合构建。在另一项测试中,Condor 任务多个 AI 智能体创建由股票和债券组成的 60 / 40 投资组合。Claude、ChatGPT 和 Gemini 挑选了基金并决定何时进行再平衡。在每个案例中,它们仅购买了少数几个来自先锋领航(Vanguard)和贝莱德 iShares 的低成本指数基金。所有三个智能体都选择了先锋领航的低成本全股市 ETF 及其全国际股市 ETF。谁能想到 Claude 竟然是个博格信徒(Boglehead)?
Public 的联合创始人兼联合首席执行官 Leif Abraham 表示,开始使用 AI 智能体的客户比尚未开始使用的客户将更多资产转移到 Public。他不认为这是一个短期趋势。“一旦你开始使用 AI 智能体,你就不会再回头了,”他说。
📄 Original Section
Long-Term Treasury Bonds Could Be a Good Contrarian Bet
A n intriguing contrar-
ian play is long-term
bonds maturing in 20
to 30 years.
There are few fans of the sector, and the negatives are many.
They include intractable federal budget deficits, inflation around 3%, and heavy corporate borrowing for data centers to fuel the artificial-intelligence boom.
Losses have accelerated recently, as the yield on the 30-year Treasury has risen almost a half percentage point to 5.6% in the past month.
Bond maven Dan Fuss, 93, who formerly headed the Loomis Sayles Income fund, told Barron's recently it would “take a team of oxen to make me buy a 20-year bond.” BlackRock urged investors to underweight long-term Treasuries, citing “persistent inflation and high debt loads.”
Fuss argues investors should buy intermediate-term debt—he favors five-to-seven-year maturities—because it offers nearly as much yield as long-term bonds with less risk. BlackRock favors agency mortgage securities that now yield over 6%.
But there are good reasons to consider long bonds.
BY ANDREW
BARY
Yields now are at 20-year highs, with 20-year and 30-year Treasuries yielding about 5.6%. That yield could prove competitive with stocks over the long term and is safe, although there is the risk inflation will erode returns.
“This is one of the best entry points for long-term bonds we’ve seen in nearly two decades. Starting yields are one of the best predictors of forward returns in fixed income,” says Gene Goldman, chief investment office at Cetera Financial Group.
Long-term bonds could offer competitive returns if equity market returns cool. There is no law that says stocks should return 10%-plus annually, as they have done for the past 10 and 30 years. Historically, there are decadelong periods of poor equity returns. That's especially true with the U.S. stock market valued at over \$70 trillion. Long Treasuries also could offer a hedge against stocks if the economy weakens—effectively a put option on the S&P 500 index yield.
There is risk. Bond prices move inversely with yields, and long-term debt gets hit hardest when market rates increase. The \$47 billion iShares Treasury 20+ Year Treasury Bond exchange-trade fund is down more
than 10% this quarter.
Investors can directly buy individual Treasury bonds and TIPS from the Treasury at regular auctions at Treasury.gov and through brokerage firms and banks. They need to buy Treasury zero-coupon and corporate bonds through banks and brokerage firms like Fidelity and Morgan Stanley.
A good alternative to individual bonds are low-cost exchange traded funds. Here are four ETFs worth considering. The iShares 20+ Year Treasury Bond ETF has an average maturity of 26 years, with a current yield of 5.4% The Pimco 15+ Year U.S. TIPS Index ETF has a maturity of 22 years.
Barron's recently highlighted the appeal of 30-year munis yielding over $5\%$ . There also is a case for long-term Treasury bonds, long Treasury zero-coupon debt, long-term Treasury inflation-protected securities, or TIPS, and long-term corporate bonds. These securities are better suited to tax-advantaged accounts like IRAs, while munis belong in taxable accounts.
The Pimco 25+ Year Zero Coupon U.S. Treasury Index ETF has a maturity of close to 28 years and a 5.5% yield, and the Vanguard Long-Term Corporate Bond ETF has a 22-year average maturity and yield of 6.2%.
The Vanguard ETF holds investment-grade debt—mostly triple-B and single-A—and yields 6.2%, almost a percentage higher than the TLT Treasury ETF.
Treasury zero-coupon bonds, or strips, also have their attributes. A buyer receives no cash interest. The interest gets paid at maturity, although investors are free to sell them before that. They are called strips because bond dealers take a Treasury 30-year bond and strip it into the component parts—60 semiannual interest payments and the principal portion of the bond maturing in 30 years—and sell them separately.
A 30-year zero-coupon bond now yields about 5.5% and trades for about 20 cents on the dollar, meaning that an investor will see a fivefold increase in value over 30 years with no risk. Zeros allow investors to lock in a yield—unlike regular Treasuries, where the yield is dependent on investing interest payments at the stated yield.
There is rate risk with 30-year Treasuries, and especially with long-term zeros, but both have a nice feature: Returns are asymmetric in the investor's favor.
Zero-coupon bonds will rise in price more if rates fall than decline if rates increase, due to what bond pros call positive convexity. A 30-year Treasury should increase about 17% in price if rates fall one percentage point and drop 13% in price if rates rise one point based on Bloomberg data, and that drop will be partly offset by interest income. The risk/return on Treasury zeros is even better.
Unlike the underlying bonds in its portfolio, the Pimco 25+ Year Zero Coupon ETF pays interest from the periodic rebalancing of the portfolio. This helps investors pay taxes since they are taxed on the annual accreted interest on Treasury zeros.
TIPS could be the most appealing group of Treasuries since they protect investors from what they fear most—higher inflation. They pay an inflation component tied to the U.S. consumer price index and a bonus, or real, rate above inflation. For 30-year TIPS, the real rate is now 3.3%, which is attractive historically. Essentially, investors are able to get a risk-free 3.3% return above inflation.
The current break-even inflation rate is only 2.3%. This means that if inflation runs above that rate—not a bad bet—investors will do better with TIPS than regular Treasuries. The break-even is calculated by subtracting the real TIPS yield from the Treasury 30-year bond yield.
Given high current rates, it might be smart now to buy that which has been most toxic—long-term bonds. B
“对于那些有兴趣尝试此类操作且知道自己在做什么,或者愿意让自己陷入一点麻烦的人来说,这些工具非常强大,”参与账户设置的 Condor 业务创新战略师 Kristopher Jones 表示。它并非一个开箱即用的解决方案。
但广泛采用的障碍正开始降低。除了 MCP 选项外,Public 已经通过其平台提供 代理。Public 的 Abraham 表示,其专有的 GMO 代理产品对某些客户来说可能更容易使用,且该公司可以访问外部 聊天机器人可能无法获取的数据源。在 Public 平台上,人类用户仍需批准 的操作。
Abraham 表示, GMO 代理擅长将客户的投资想法转化为可执行的计划。“它们的设计初衷不是为你提供想法,”他说,“这里有一个重要的细微差别。你心中有一个关于想做什么的想法雏形,即使你还没有完全形成如何操作的具体想法,代理也可以帮助你。”
📄 Original Section
BY BILL ALPERT
Two days after Z Squared began trading on Nasdaq in April, its executives rang the closing bell, joined by trader and television commentator Jon Najarian. A month later,
the crypto mining firm got tapped for the FTSE Russell 2000 index.
That April debut was part of a plan to get unhappy investors out of a private-equity fund called Broadstreet and, in so doing, refute fraud charges that the Securities and Exchange Commission is pressing against Broadstreet's leaders. In Miami's federal court, the SEC accuses Broadstreet's top three executives of raising \$1.2 billion from more than 1,000 investors in a “Ponzi-like” scheme that promised annual returns as high as 28% from things like real estate development, small-business lending, and Dogecoin mining.
While fighting the SEC fraud charges, which they “categorically deny,” the Broadstreet executives redeemed more than 1,300 investors by giving them most of Z Squared’s stock before it started trading. Broadstreet is now trying to redeem its remaining investors with shares in Soulpower Acquisition, a New York Stock Exchange-listed blind-pool special purpose acquisition company run by a self-improvement author.
In July, Broadstreet told the Miami federal court that these shares in the two public companies were worth \$3.6 billion and that investors had suffered no losses.
Yet since their April redemption, the Broadstreet holders have seen their Z Squared shares fall nearly 80%. The two stocks' combined market value is barely \$550 million. Investors tell the SEC that they went into Broadstreet expecting quarterly distributions of cash income. Those payouts halted last year for many investors.
“I did not want speculative stock,” said 64-year-old Broadstreet investor Nikhil Patel, in a federal court declaration filed in August, after Broadstreet sued him and other investors who asked for cash instead of stock.
“I am retired and disabled,” Patel told the court. “[M]y Broadstreet investments represented a substantial portion of my retirement savings.”
Broadstreet says its investors signed releases, agreeing to everything the private-equity firm has done.
"This is a case about ultrarich investors who have now enlisted the government's help to try to have them get their money back in an investment where they self-described themselves as wealthy risk takers," Lorne Berkeley, a lawyer who represents Broadstreet and its executives, told Barron's. "Broadstreet is proud of the two public company exits presented to its investors who overwhelmingly approved the exits."
Two brothers, Joseph and Steven Baldassarra, created the Broadstreet private-equity fund in Greenville, S.C., in 2020.
In 2022, they brought in attorney David J. Feingold as Broadstreet's CEO. In 2011, he and two co-defendants paid \$18.8 million to settle—without admitting—charges by the Federal Trade Commission that the First Universal mortgage modification business deceived indebted homeowners by charging thousands of dollars in upfront fees while doing little to relieve the customers' debts.
Apart from his SEC case, Feingold is fighting the Internal Revenue Service in a Greenville federal court, after it assessed fraud penalties and alleged that he dodged taxes on millions he got from Broadstreet affiliates.
Neither Feingold nor the Baldassarras responded to Barron's' questions beyond their lawyer's statement.
Working out of a Greenville building owned by Feingold, Broadstreet salespeople recruited investors with the help of outside stockbrokers. Most of the investors' declarations in the Miami federal court docket said they had learned of the firm through friends and family.
The firm told investors they were putting their money in any of 14 separate strategies, from home-building to crypto mining.
In a first-quarter 2024 report to investors, Broadstreet boasted that its Dogecoin mining operation was on track to double that year. “The Manager has targeted a 28% annual return,” it told investors.
The SEC started investigating Broadstreet in 2022, and in January 2025 the agency filed a sealed complaint alleging that the Broadstreet bosses used new investors' money to pay inflated returns to those in strategies that were actually unprofitable. Two days after the SEC filed suit, a federal judge ordered Broadstreet to stop soliciting new money.
Feingold denied the charges and asked the federal judge to let Broadstreet keep raising money. He told the court in February 2025 that he ran the 14 businesses, while the Baldassarras ran the funds. Broadstreet's real estate ventures provided thousands of jobs in the Carolinas, said Feingold, and it ran 16,000 Dogecoin mining computers in five data centers and had five more centers coming on-line.
"We have nearly \$225 million worth of machines that consume 100 Megawatts of power or enough energy to power nearly 120,000 homes," Feingold told the court. "It is a massive business."
Dallas-based Kinjalkumar Patel, who invested in the crypto mining offering in May 2023, later told the court that Broadstreet cash payments on his investment came to a halt in March 2025. He said he and his wife had put all of their savings into Broadstreet.
That's when Feingold and the Baldassarras began telling investors that Broadstreet would let them exit their investments for cash, or for shares in a couple of public companies.
Investors in the Dogecoin business learned the next month that they
Source: FactSet
would get shares in a money-losing biotech company called Coeptis Therapeutics Holdings as a swap for 9,800 of Broadstreet's crypto mining computers.
SEC filings by Coeptis in June 2025 said that accounting firm Cohn-Reznick's partners Anthony Doughty and Jake Wright appraised the mining systems in March 2025 at a value of \$660 million, or \$67,378 per unit. The filings said the valuation had assumed the machines were all Antminer L9 systems when, in fact, 84% of the fleet were L7s—an older, less-powerful system.
The \$660 million CohnReznick valuation led to Broadstreet investors getting 85% of the merged company's shares when the deal went effective in April 2026. A pro forma balance sheet in the merger proxy filing showed that the Broadstreet business had carried the mining systems at only \$35.3 million.
The CohnReznick partners didn't respond to Barron's queries about their valuation.
Nearly 700 Broadstreet investors had elected to take cash, the SEC later told a court. Broadstreet said it would distribute the cash and stock this year. When the time came in May 2026, Broadstreet took the cash option off the table, telling every investor that the fund could force them to take stock.
When it was tapped for the Russell 2000 in May, Z Squared had yet to report any financial statements. FTSE Russell told Barron's that the information available at the time satisfied Russell's eligibility and investibility criteria.
Z Squared's June-quarter financial statements did appear on Aug. 13. The balance sheet carried the crypto mining fleet at \$12.4 million, or \$1,269 per unit.
That was less than 1/50th the value ascribed in the merger, two months before.
Z Squared CEO David Halabu told Barron's that CohnReznick estimated the fair market value of the company's crypto mining operations, not the cost or resale value of the machines.
A large market value is hard to see in Z Square's only public financials. In the June period, it lost money on its Doge mining activities.
“Altcoin mining economics have deteriorated sharply with underlying token prices falling precipitously," Halabu said. "Some miners have shut down operations entirely."
As a new initiative, Z Squared hopes to develop data centers for artificial-intelligence computing. The crypto mining fleet isn't suited for AI modeling, says Halabu.
Z Squared shares have plummeted to \$3.95 from \$18.80 since their April debut, even though company filings say it gave slugs of stock to Najarian and others, under contracts to promote the stock at the NYSE, in broadcasts, and online. Inquiries to Najarian's investor relations business weren't answered.
Broadstreet, meanwhile, has been working to redeem most of its remaining investors by giving them stock in Soulpower, a SPAC that said in November of last year it will merge with a business that would contribute a British Virgin Islands banking license, land and mines in places like Mexico and South Africa, and 23 properties in the Carolinas from Contender Development, a company that Feingold told the court he partly owns. Drawing on another CohnReznick appraisal, Soulpower said the resulting company would be worth over \$8 billion.
“SOUL will be the most loved bank on earth,” said Soulpower CEO Justin Lafazan in that November deal announcement. He declined to discuss the Broadstreet exchange deal with Barron’s.
At the same time, Broadstreet is suing five investors who continued demanding cash instead of Soulpower stock. The firm seeks a court ruling that it can redeem them with stock. It is also suing an investor for defamation over comments she posted on X.
As Broadstreet executes its plans to rid itself of outside investors, the SEC has renewed its request for the judge to appoint a receiver who would take control of the private-equity investments. If not stopped, the agency told the court on Sept. 10, the investors will end up with locked-up shares of Z Squared and Soulpower, while Feingold, the Baldassarra brothers, and other Broadstreet insiders end up with the remaining cash and assets.
"The manager does not have the power to redeem investors with anything it wants, like bags of rocks," said the SEC in its September court filing. "All of this is the natural result of a fund that promised and paid returns it could not afford to pay." B
经纪行业高管表示,客户对 AI 工具的需求正在增加。他们正在构想这样一个未来:所有投资者都通过 AI 聊天机器人与他们的经纪账户进行交互,即使他们没有使用它来执行交易。
Webull 的 Denier 将其比作由互联网和智能手机驱动的变革。“我认为在五年内,大多数交易将通过平台内置代理完成,”他表示。“这是我们业务的一个巨大转变。如果我们现在不领先于此,如果我们现在不构建这种体验,那么我们将落后。” B
HomeShuffle
MANSION GLOBAL
📄 Original Section
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这次糟糕的市场广度看起来也更加合理。投资者并非像互联网泡沫时期那样在“旧”经济和“新”经济之间进行二分法选择,而是在实时评估 AI 的赢家和输家。以 Meta 的上涨为例。随着该股飙升,Planet Fitness 和《纽约时报》等公司的股价则出现波动,原因是市场担心新的个人 AI 助手 Muse 将帮助付费客户取消那些他们不再使用的服务订阅。与此同时,嘉信理财(Charles Schwab)和美国银行(Bank of America)的股价下跌,因为人们担心这项技术会将投资者的资金从超低收益账户中抽走。投资者并非被某种投机狂热所掌控;他们正在就 AI 驱动经济中的赢家和输家阐述一个全面且合理的论点。
“也许真正的主题,”Carrick Lane 的 John Marshall 表示,“是目前市场上最突出的趋势都存在赢家和输家。”
债券动荡,股市无感
债券市场的波动并未反映在 VIX 指数中。
来源:彭博(Bloomberg)
📄 Original Section
BY ANDREW WELSCH
t's a niche but growing part of the agentic craze: using artificial-intelligence bots to trade stocks with little to no human intervention.
Since Robinhood Markets launched agentic trading in May, more than 150,000 customers have opened agentic trading accounts, according to the company. AI agents use Robinhood's tools almost 30 million times a day. A month after brokerage firm Public made AI agents available to all users, customers created 20,000 agents and more than \$200 million in assets are overseen by AI agents, according to Public.
But do they work? And can they beat the market? That has been more mysterious; agents' trading habits have been a black box. But a new report from Condor Capital Wealth Management, which has studied robo-advisor returns for years, sheds light on these agents as traders. Barron's got an exclusive look at the data.
Condor gave three AI agents \$500 each and provided the same daily prompt: Make as much money as you can. Their behavior offers a sneak peek into the future of agent-led trading, a world in which automated bots use sophisticated AI models to buy, flip, rebalance, and harvest tax losses. All before your stockbroker wakes up.
The agentic trading tests conducted by Condor involved Anthropic's Claude, Alphabet's Gemini, OpenAI's ChatGPT, and accounts at three brokerage firms: Robinhood, Webull, and Public, which have all turned on the ability to plug AI models into dedicated agentic accounts. (Other firms, including Interactive Brokers and eToro, are also now offering agent plug-ins.)
For now, at least, those brokers can rest easy. The agents aren't generating a significant edge. After three days of trading, returns for Claude and Gemini were $2.9\%$ and $0.9\%$ , respectively. ChatGPT posted a loss of $0.7\%$ .
In the trading test, Condor told agents to use stocks and exchange-traded funds only, and return to 100% cash by the close of each trading session.
Each agent also scheduled its own cadence for check-ins and trades. Condor says Claude and ChatGPT tried similar approaches, searching the web for what profitable traders supposedly do; that led them to loosely copy a kind of momentum trading strategy. Gemini checked in a handful of times a day, never set a stop, and only ever traded Nvidia shares.
Claude scheduled for itself 10 check-ins a day and journaled lessons to itself. For example, when Claude bought into the top of an opening spike and had to sell at a loss, it wrote the mistake into instructions that Claude prepared for itself, Condor says. The following day, Claude canceled two orders rather than chase a big rally at the open. “It noticed something, wrote it down, and behaved differently the following day,” states Condor’s research report. “The loop is simple, but it offers a glimmer of what self-learning agents will eventually be able to do.”
Condor cautions that the test was intentionally simplistic. Given detailed and continuously updated instructions, the agents might perform better. But that would mean more work and, importantly, judgment on behalf of the user.
"The average person who needs money management does not want to manage a system to that level of detail, so the agent is worth the most to the people who need help the least," says Condor's report.
The tests come with agentic technology poised to play a greater role in the investing experience. Some brokerage industry executives and analysts think it could lead to higher trading volumes as more investors begin using AI for research, automation, and other tasks.
Yoni Assia, CEO of brokerage firm eToro, says trading volumes typically rise in the morning and fall at night. "But for agents, there is no morning or night," Assia says. "It can trade all the time."
Agents, to be sure, aren't just day traders. They can also be used to set asset allocations and long-term portfolio construction. In a separate test, Condor tasked multiple AI agents with creating a 60/40 portfolio composed of stocks and bonds. Claude, ChatGPT, and Gemini picked the funds and decided when to rebalance. In each instance, they bought only a handful of low-cost index funds from Vanguard and BlackRock's iShares. All three agents chose Vanguard's low-cost Total Stock Market ETF and its Total International Stock ETF. Who would've guessed Claude was a Boglehead?
Leif Abraham, co-founder and co-CEO at Public, says customers who have started using AI agents are moving more assets to Public than those who haven't begun yet. He doesn't think it's a short-term trend. "Once you start using the AI agents, you're not going back," he says.
Condor's AI tests follow a similar approach to what Condor took with the robo-advisor reports that the firm began producing a
that the firm began producing a decade ago. Condor opened accounts at robo-advisors with real money and tracked the results to see how well a new technology could manage a portfolio on behalf of investors. Condor's robo report was the foundation of Barron's ranking of robo-advisors.
Condor's tests come with some caveats, such as a short testing period and small balances. Given rapid advances around AI, the same test could yield different results next year, or even next month. "It's pretty powerful, you can do a lot with it, but it is still very early days," says David Goldstone, manager of investment research at Condor.
Executives from Robinhood, Webull, Public, eToro, and Interactive all told Barron's that agentic trading remains a niche activity, but they see applications for a mainstream audience on the horizon.
As for the AI labs, OpenAI and Alphabet didn't respond to questions about agentic trading. Anthropic declined to comment.
投资者远非自满,而是敏锐地意识到了利率上升带来的压力,这就是为什么平均股票表现如此糟糕的原因。事实上,根据高盛的数据,美国股市的整体情绪已大幅转负,目前已跌至与3月份相同的低点。只要 AI 叙事能够维持,且业绩不至于令人大失所望,市场将为 2026 年的强劲收官做好准备。
即便上涨的浪潮并不能带动每一只股票。B
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The AI Day Traders
The do-it-yourself agent movement may turn out to be a brief moment in time. Condor's testing suggests that
To test a new class of AI agents, Condor Capital deposited \$500 at a brokerage firm and gave each agent simple instructions: Make as much money as you can in three days. | Return on $500 | Self-chosen check-in cadence | Tickers traded | Claude Opus 5 | 2.9% | 10 scheduled check-ins per day | NVDA, SOFI, HOOD, PLTR, INTC, MARA | ChatGPT-5.6 Sol | -0.7 | Every 5 minutes, about 75 per day | NVDA, IWM, MSFT, AMZN, PLTR, AMD, QQQ, CMG, SHOP | Gemini 3.1 Pro | 0.9 | 5 to 8 per day | NVDA | Source: Condor Capital Wealth Management
Condor tasked AI agents with constructing a 60/40 portfolio of stocks and bonds. Every agent chose low-cost index funds. | Ticker (Role) | Percentage of Portfolio |
Claude Opus 5 | VTI (U.S. total stock market) | 40% | VXUS (International stocks (ex-U.S.)) | 20 | VTEB (Muni bonds) | 40 |
DIY agentic trading, which uses so-called model context protocol, or MCP, isn't for the average person. It requires modest technical skills to set up, and investing savvy to direct the AI bot.
"This stuff is really powerful for people interested in doing this sort of thing and who know what they are doing, or are willing to get themselves into a little trouble," says Kristopher Jones, Condor's business innovation strategist who was involved in setting up the accounts. It isn't an out-of-the-box solution.
But the barrier to broader adoption is starting to come down. Public already makes AI agents available via its platform, in addition to the MCP option. Public's Abraham says that its proprietary AI agent offering can be easier to use for some customers, and that the firm has access to data sources that outside AI chatbots might not. The human user still has to approve an AI's actions at Public.
Abraham says AI agents are skilled at turning a customer's investing idea into an actionable plan. “They aren't designed to give you ideas,” he says. “There is an important nuance there. You have a kernel of an idea of what you want to do, even if you haven't fully formed the idea of how you want to do it, and the agent can help you.”
接下来的问题是如何构建指数。虽然近期大盘股表现更优,但这并非一直如此。贝塞姆宾德表示:“在历史的大部分时间里,购买最大的股票一直是一项显著糟糕的投资。”如果无法提前预测哪些股票会胜出,更好的指数策略可能是采用等权重股票,而不是像标准普尔 500 等市值加权指数那样涌向最大的股票。将几只集中型基金与像 Invesco Russell 1000 Equal Weight 这样的交易所交易基金(ETF)相结合,可能是解决这一矛盾的一种方法。
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This past week, Robinhood unveiled Robinhood Agents, an agentic trading offering available via the company's
app that allows users to chat with AI agents to research, develop trading strategies, and execute trades in dedicated agentic accounts. The agent can access funds only in a user's dedicated agentic trading account, and users can choose to manually approve each trade. Robinhood allows users to choose from a lineup of existing AI models, including ones from OpenAI. The MCP option remains for users who want to connect their own third-party agents, but Robinhood executives believe that Robinhood Agents will become the preferred agentic trading method for most customers.
"[The MCP option] is complicated; it involves using multiple devices and different apps," said Abhishek Fatehpuria, vice president of product management, at a company event unveiling Robinhood Agents. "And oftentimes the connections between these different apps are slow and brittle."
Anthony Denier, group president and U.S. CEO of Webull, says his company is also working on embedding agentic trading in its platform. He believes that will lead to greater adoption because there are a finite number of investors willing to do the work to connect their own AI agents through an MCP. “When the agent is directly accessible on the platform itself, then the TAM [total addressable market] explodes,” he says.
At Webull, customers using an agentic account have to approve transactions themselves and be logged into their account. "They can't set it up and go on vacation," Denier says.
Brokerage industry executives say they're getting increased demand from customers for AI tools. They are contemplating a future in which all investors interact with their brokerage accounts via an AI chatbot, even if they aren't using it to execute trades.
Webull's Denier compares it to the transformation driven by the internet and smartphones. “I think in five years’ time, the majority of transactions will happen through an on-platform agent,” he says. “That is a huge shift in our business. If we aren’t ahead of that now, if we aren’t building that experience now, then we will fall behind.” B
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A Divided Stock Market Could Set Up a Serious Rally
Yes, the market is being led by a handful of highfliers. But that isn't a bad thing.
●
BY ALEX ROSENBERG yawning gap has opened up inside the stock market that to some looks like an abyss. We see an opportunity.
On the sur-
face, the stock
market is doing just fine. The S&P 500 index ended September with a loss of just 0.5%, and is less than 1% below the record high it set in August. That's certainly better than might be expected, given that the Federal Reserve has started raising interest rates, the 10-year Treasury yield just hit its highest level since 2002, and the Iran war continues with no end in sight, giving a boost to energy prices. Meanwhile, there are still lingering questions about the artificial-intelligence trade, from the fundamental—how will Anthropic and OpenAI turn a profit?—to the existential—will artificial intelligence mean the end of humankind?
A glimpse beneath the surface reveals that these concerns are affecting stocks—just not at the index level. While the market-cap-weighted S&P 500 fell 0.5% in September, an equal-weighted version dropped 5% and is on pace for its seventh straight weekly loss, a losing streak previously seen only in 2002 and 2022.
It gets worse. Not since 2000 have more S&P 500 stocks made 52-week lows than 52-week highs when the overall index was within 2% of a record high, according to BTIG Chief Market Technician Jonathan Krinsky, an ominous sign for a market that has drawn more than a few comparisons to the dot-com bubble.
The divide in the market is wide and getting wider. Out of the 11 S&P 500 sectors, only information technology and communication services rose in September. Chips, though still down from their record high, contributed, too, with the PHLX Semiconductor Index surging 9.5% in September, while the Roundhill Magnificent Seven exchange-traded fund rose 4.3%. And it's impossible to overstate the impact of Meta Platforms, whose 27% September Muse-inspired rally added 0.6% to the S&P 500's monthly performance.
Some worry that this strange dynamic presages a broader decline for the S&P 500. Krinsky acknowledges that beaten-down sectors could bounce, but says the most likely scenario is that “the leaders succumb and major indexes catch down to what the majority of stocks have been doing.” Famed bond investor Jeffrey Gundlach describes the problem in arboreal terms, telling David Rosenberg that, like a particular century-old silver maple in his yard, the market has hollowed out after rotting from the inside and is now “on the edge of complete failure.”
The market's bad breadth, however, looks quite different from other episodes of narrow markets. Investors aren't simply bidding up a small set of winners into nosebleed territory. Nvidia, the world's biggest stock, has seen its price/earnings ratio fall below the overall market's even as it has rallied $24\%$ this year. Meta's valuation has fallen this year, as well, despite its September surge. That's in contrast to the dot-com bubble, when the valuations of heavyweights like Microsoft and Cisco Systems surged.
The poor breadth also looks more rational this time around. Rather than the bifurcation between the “old” and “new” economies seen during the dot-com bubble, investors are trying to gauge the winners and losers of AI in real time. Take the Meta rally. As that stock soared, shares of companies like Planet Fitness and New York Times stumbled, hit by fears that the new personal AI agent, Muse, will help paying customers cancel subscriptions to services that they no longer use. Charles Schwab and Bank of America, meanwhile, dropped over concerns that the technology would flush investor cash out of ultralow-yielding accounts. Investors aren’t gripped by some speculative frenzy; they’re articulating a holistic and reasonable thesis about the winners and losers in an AI-driven economy.
A similar dynamic is playing out elsewhere in the market. The surge in the price of diesel has benefited refiners like Valero Energy and Phillips 66, which hit fresh all-time highs last month, while air carriers like JetBlue Airways and American Airlines Group have been struggling. And while rising rates are generally negative for equities, a higher-yield environment is certainly harder on companies that have large amounts of floating-rate debt, or whose potential cash flows are many years away.
“Maybe the real theme,” says John Marshall of Carrick Lane, “is that the trends that are most prominent in the market now all have winners and losers.”
Stocks Shrug as Bonds Shake
The bond market's volatility isn't being reflected in the VIX.
Just four stocks are responsible for almost half of the S&P 500's year-to-date performance.
YTD contribution to S&P 500
Note: Data are as of Oct. 1
Sources: Bloomberg, Barron's calculations
Perhaps the focus on market breadth, then, is missing the point. Owen Lamont, portfolio manager and researcher at Acadian Asset Management, says it's “crazy” to argue that the stock market is risky just because it's highly concentrated. “If you took the Magnificent Seven, and broke each into seven smaller firms so it was the Magnificent 49, why would that be any better?”
The historical record suggests that breadth isn't the bad omen that you might think it is. "It's always preferable to see a market rally on broad participation rather than a small group of stocks, and the durability of narrow rallies is more dependent on that narrow group of stocks," writes Bespoke Investment Group. "Contrary to popular wisdom, though, weak breadth alone hasn't been a reliable bearish short-term signal. In prior periods when breadth deteriorated but price held up relatively well, forward returns saw little in the way of a negative impact."
After all, indexes, unlike silver maples, are recomposable. As failing companies lose value, they are replaced within the index by up-and-coming names—not because the index masters are betting that these incoming companies will outperform the outgoing ones, but simply because they’re striving to maintain an index that continually gives the most accurate read on the segment of the market in question, such as large-cap U.S. stocks in the case of the S&P 500. Out of the 500 companies originally included in the S&P 500 in 1957, only about 50 remain. Like Theseus’ ship, the market keeps sailing on.
And the weather might soon get more temperate. Like Krinsky, Morgan Stanley Chief U.S. Equity Strategist Mike Wilson believes that “the divergence between the index and breadth must be reconciled,” and he says the most likely scenario is that the overall market will slip in the weeks ahead. But he remains fundamentally bullish. “If bond volatility doesn’t calm down, we see breadth and price meeting in the middle in the next month followed by a strong finish to the year,” Wilson writes. “If bond volatility subsides sooner, breadth is likely to catch up to index price, driving both higher in the near term.”
One thing that could calm the bond market is a resolution to the conflict in Iran. “I’m in the camp that we’re going to find a solution in Iran,” says KKM
Financial CEO Jeff Kilburg. “I think we get out this month, and then we see crude oil crack, and we see rates crack,” with the 10-year yield falling back below 5%.
Another catalyst: the start of earnings season. It's a truism on Wall Street that investors seem to worry about all of the macro headwinds during the months between earnings seasons, only to be reminded just how good they have it when the next crop of reports comes around. And third-quarter earnings season should be better than good. Analysts collectively estimate that S&P 500 companies will report year-over-year earnings growth of $29\%$ for the quarter, which would mark the third-straight quarter of earnings growth about $25\%$ , according to FactSet.
A cooling-off in oil prices and rates, "in conjunction with earnings season showing us yet more $25\%$ -plus profit growth, is the catalyst for a run-up to 8000 in the S&P," Kilburg says, referring to a level $4.4\%$ above Thursday's close.
Finally, the overhang of the midterm elections will pass after Nov. 3. “Historically, U.S. equity volatility has tended to rise in the months leading into the midterm elections,” writes Dubravko Lakos-Bujas, head of global markets strategy at J.P. Morgan. Given that implied volatility has remained remarkably low, he does think there’s room for the Cboe Volatility Index, or VIX, to rise from here. But he adds that the elections “should serve as an important market-clearing event. Historical performance in the months following the midterms tends to be positive.”
The great hope is that all of the major drivers of macro uncertainty will recede, while companies continue to report boffo earnings. That may be a bit too much to expect. But we do know that overall stock market valuations have fallen meaningfully this year, and have continued to decline during the past eight weeks of market churn.
Far from being complacent, investors are acutely aware of the pressures caused by rising rates, which is why the average stock has performed so poorly. In fact, according to Goldman Sachs, overall U.S. equity sentiment has fallen sharply into the negative, and is now as low as it was in March. As long as the AI narrative holds together, and earnings aren't terribly disappointing, the market is setting up for strong close to 2026.
Even if the rising tide doesn't lift every stock. B
然而,Crawford 并不害怕深入挖掘知名度较低的公司。该 ETF 持有三家私有公司的股份:Anthropic、Figure AI 和 VAST Data。“Figure AI 是美国领先的人形机器人公司之一,而我们正处于人形机器人革命的极早期,”她说。“机器人的使用将使我们能够在美国迎来一场工业复兴。”
📄 Original Section
Focused Funds Can Help You Navigate a Top-Heavy Market
How a “core and explore” approach, with index funds at the core, could give investors an edge in a market dominated by an increasingly small group of technology names.
Y
ou can't time the market. But maybe you can increase your upside or limit your downside with a concentrated fund.
Anyone watching the market knows that a mere
handful of stocks have accounted for most of the gains in recent years. It isn't a novel phenomenon. In fact, it has been true for at least a century. And that fact should make many investors take another look at their stock fund strategies.
From January 1926 through December 2025, just 46 stocks—out of 29,754 common stocks listed on the public U.S. stock markets over that period—accounted for half of the \$91 trillion in net wealth creation, according to a study published in March titled “One Hundred Years in the U.S. Stock Markets.” Worse, the median buy-and-hold return for all those stocks was a negative 6.9%.
The study's author, Hendrik Bessembinder, a professor of finance at Arizona State University's W.P. Carey School of Business, calls people's reaction to his findings a “Rorschach test” of their investment styles. “For the large majority of investors, the evidence just strengthens their view about the desirability of a well-diversified, low-cost portfolio without a lot of trading,” he tells Barron's. “My evidence says if you pick 10 stocks at random, most likely you're going to underperform.”
Yet other investors are looking for a big hit. “The chances of getting a 100-bagger are much better if you pick one or two individual stocks and try to find the next Amazon.com as opposed to buying the whole basket,” Bessembinder says. This group either does their own stock-picking or hires skilled money managers who hold a concentrated portfolio of just a few hoped-for outperformers.
PGIM Jennison Focused Value 和 Putnam Focused Large Cap Value ETF 在集中度方面采取了更平衡的方法。两者都没有针对其罗素 1000 价值指数(Russell 1000 benchmark)进行大规模的行业押注,该指数近期持有 21% 的科技股。虽然价值股总体在 2022年表现更好,但 Putnam Focused Large Cap 脱颖而出,仅损失 2.6%,而 PGIM Jennison Focused 的母体共同基金(将于 11 月与 PGIM ETF 合并)则损失了 11.1%。
由于强调高质量股票,这两只基金都不是人们所称的深度价值或经典价值基金。两个投资组合的平均市盈率都在 17. 左右。这低于标准普尔500指数的 20, 但高于在一个已经昂贵的市场中股票的长期平均市盈率 16 P / E。
相比之下,AMG Yacktman Focused 的平均市盈率为 12.6,Davis Select U.S. Equity 的市盈率为 12.8。但你必须接受波动性。Subotky 和经理 Stephen Yacktman 表示,他们持有最受 AI 追捧的股票——三星电子(Samsung Electronics)大约十年之久,之后它才有了显著表现。
与此同时,Davis Select 经理 Chris Davis 的最大持仓 Capital One Financial 近期下跌,因为投资者担心其最近收购 Discover 的整合情况以及对次级债务的风险敞口。但 Davis 认为,在一家痴迷于 AI 的公司中,该公司的真实价值在于 [...OMITTED...]
📄 Original Section
Core and Explore
Vanguard Group founder Jack Bogle argued against searching for needles in a haystack in favor of “buying the whole haystack” with a broadly diversified index fund. Yet searching for a few needles with a top focused-fund manager can help amplify returns in the good times or buffer a largely indexed portfolio in the bad.
"It isn't an either/or decision," says Jason Subotky, co-manager of the AMG Yacktman Focused fund.
“You could be largely indexed, but then still have exposure to the managers that you know are doing something to add value significantly.”
Such a strategy is known as “core and explore” on Wall Street.
"If you look at the lost decade from the end of the 1990s to the end of 2009, that's what really helped people discover us because we were able to generate very strong returns against an index for the S&P 500 that went nowhere," Subotky says.
From Dec. 31, 1999, through Dec. 31, 2009, Yacktman Focused gained a cumulative 206% while the Vanguard 500 Index fund lost 2%, according to Morningstar. Then again, if you look at Vanguard 500 from Dec. 31, 2009, until today, it gained 832% versus Yacktman's 569%. Clearly, there are advantages to owning both funds, although it's notable that Yacktman won over the entire period, up an eye-popping 1,944% versus the S&P 500 fund's 811%.
Then there is the question of how to index. While the largest companies have recently outperformed, that hasn't always been true. "For most of history, buying the largest stocks has been a notably bad investment," says Bessembinder. If it's impossible to predict which stocks will win in advance, a better index strategy might be to equal-weight stocks instead of piling into the largest ones, as market-cap weighted indexes like the S&P 500 do. A few focused funds paired with an exchange-traded fund like Invesco Russell 1000 Equal Weight could be one way to square the circle.
An index fund core helps because focused-fund returns tend to be “lumpy”: Even the best funds often have bouts of underperformance followed by dominant periods. But the worst funds can be extraordinarily volatile from being too concentrated in risky companies. (For this article, we define “focused” as funds with 50 stocks or fewer.)
Good focused funds tend to have one factor in common—a penchant for high-quality companies with strong businesses and clean balance sheets. "We generally talk about quality companies that have staying power," says Tom Hancock, co-manager of the GMO U.S. Quality ETF, which currently holds 43 stocks. These are businesses he can picture being “relevant and vibrant five to 10 if not 100 years out.”
GMO's \$5 billion ETF, which launched in 2023, is similar to its older institutional-only mutual fund, GMO Quality, which has beaten the S&P 500 index and $94\%$ of its peers in Morningstar's large blend category with a $16.1\%$ 10-year annualized return.
Although valuations matter to Hancock, he subscribes to Warren Buffett's philosophy that it's better to buy a wonderful company at a fair price than a fair company at a wonderful price. "If you're thinking with a long time horizon, the entry-point [valuation] doesn't really matter as much," he says.
Hancock holds different buckets of stocks. There are quality growth stocks like Microsoft and Alphabet and core quality “stable ballast” ones such as Johnson & Johnson and Procter & Gamble. (Quality value refers to temporarily out-of-favor companies in cyclical industries.)
Some companies shift from one category to another. Software names Accenture and Salesforce are now considered value stocks. “Two or three years ago, we would have called those uncontroversial growth companies, and today they’re under a big cloud,” Hancock says. He calls the threat to them from artificial intelligence “overblown.”
注:\*对于价格最低的股票或波动较大的小盘股,最好持有持股数量较多的 ETF。回报率统计至 9 月 28. 五年、10年和 15年回报率为年化回报率。波动率为标准差的衡量指标。N / A = 不适用。来源:Morningstar Direct
市场被误解了。“Capital One 是最初且最成功的金融科技公司,”他说。“它始创于一家数据科学公司,并由数据科学家运营。在所有持有 AI 专利和机器学习专利的公司中,它排名前 10。”
Davis 认为,这种技术优势使其成为比竞争对手更好的信用卡贷款机构。“金融服务公司基本上是在从事风险定价业务,”他说。“你对信息和数据的利用越好,就越能更好地为风险定价。”
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Core Focused
Because value and growth styles go in and out of fashion, a focused fund ideally should incorporate both strategies, as does GMO's ETF, so returns are less lumpy. The JPMorgan Equity Focus ETF typically invests in the 20 best large-cap ideas from J.P. Morgan Asset Management's growth team and 20 from its value team, and tilts the portfolio slightly toward growth or value in different market environments. Manager Felise Agranoff runs the growth side of the portfolio and Jack Caffrey, the value. Both have over two decades of experience at J.P. Morgan and work with some 50 analysts and another co-manager, Graham Spence, to research companies.
Having such a deep analytical bench gives Agranoff the confidence to invest 9% of the fund's portfolio in AI chip maker Nvidia. "Our views on Nvidia have evolved over time," she says. In 2023, when the ETF purchased the stock, "we were extraordi-
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narily bullish because we felt the market underappreciated both the magnitude and duration of spend around generative AI and Nvidia's dominant position." Since then, based on valuations and the competitive outlook from rivals like Broadcom, she has adjusted her position, adding to it recently as the stock price came down.
Although the ETF can tilt toward value, as it did in early 2026, Caffrey tends to hold smaller individual positions. Value stocks are more cyclical than growth ones, so being too exposed to any individual one could be riskier. Still, in economically sensitive sectors, he holds the highest-quality names like Morgan Stanley in financial services and ExxonMobil Holdings in energy.
While a core focused fund offers balance, if you want that “100-bagger” stock, you could tilt toward a growth or value fund depending on market conditions. No question, the Alger Focus Equity mutual fund and its newer companion ETF, Alger Concentrated Equity, have been on fire lately.
Alger Focus Equity, with just 42 stocks and a 47% tech weighting, has beaten 97% of its peers in the past 10 years with a 21.7% annualized return.
It is run by co-managers Patrick Kelly and Ankur Crawford, while Alger Concentrated Equity holds 30 stocks and is run by Crawford alone. Launched in 2024, the ETF has a lower $0.56\%$ expense ratio, but a higher $14.8\%$ Nvidia weighting versus the mutual fund's $12\%$ .
Yet Crawford isn't afraid of drilling down into lesser-known names. The ETF holds shares in three private companies: Anthropic, Figure AI, and VAST Data. “Figure AI is one of the leading humanoid companies in the U.S., and we're just at the very beginning of the humanoid revolution,” she says. “The use of robots is going to allow us to have an industrial renaissance in the U.S.”
Still, one should expect more lumpiness with such a tech-heavy fund. In 2022's bear market, when highly valued growth stocks crashed, Alger Focus Equity fell $36.0\%$ compared with the average large-growth fund's $-29.9\%$ and the S&P 500's $-18.2\%$ .
The PGIM Jennison Focused Value and Putnam Focused Large Cap Value ETFs have a more balanced approach toward concentration. Neither takes big sector bets against
their Russell 1000 Value benchmark, which recently held 21% in tech. Although value stocks in general did better in 2022, Putnam Focused Large Cap Value stood out, with only a 2.6% loss, while PGIM Jennison Focused Value's parent mutual fund, which will merge with the PGIM ETF in November, lost 11.1%.
Neither fund is what one would call a deep value or classic value fund because of their emphasis on high-quality stocks. Both portfolios have average price/earnings ratios around 17. That's less than the S&P 500's 20, but higher than the long-term average 16 P/E for stocks in an already pricey market.
Contrast that with AMG Yacktman Focused's 12.6 average P/E or Davis Select U.S. Equity's 12.8 P/E. But you have to accept the lumpiness. Subotky and manager Stephen Yacktman say they held their top AI stock darling, Samsung Electronics, for about a decade before it did much of anything.
Meanwhile, Davis Select manager Chris Davis' largest position, Capital One Financial, has sunk recently because investors are worried about the integration of its most recent Discover acquisition and exposure to sub-prime debt. But Davis thinks the company's true value in an AI-besotted
更广泛地说,大型经济情绪指标可能已经与实际经济脱节。毕竟,即使在失业率低、增长稳健且股市创纪录的情况下,这些指标仍在下降。根据高盛经济学家 Joseph Briggs 和 Sarah Dong 最近的一份报告,人们的幸福感在 2020 年急剧恶化,且未能随经济和股市同步恢复。这种情况延伸至所有群体和政治党派,且在房主和租房者中同样存在。
高盛的报告引用了芝加哥大学经济学家 Sam Peltzman 的一篇论文,指出人们对世界现状变得更加悲观,其原因与经济无关。该论文发现,自 2016 年以来,人们对几乎所有社会和政府机构的信心下降,这在很大程度上抵消了财务状况的改善。情绪调查可能更多地反映了这种普遍的衰落,而非对经济看法的转变。Conference Board 和密歇根大学调查的代表未能接通。
来源:Bloomberg, 美国经济分析局 (Bureau of Economic Analysis)
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Index Funds | Fund / Ticker | Morningstar Category | No. of Stock Holdings | 1-Yr Return | 5-Yr Return | 10-Yr Return | 15-Yr Return | Expense Ratio | 5-Yr Volatility | Invesco Russell 1000 Equal Weight / EQAL | Mid-Cap Blend | 1,011 | 13.2% | 6.9% | 10.1% | N/A | 0.20% | 16.4 | Vanguard S&P 500 / VOO | Large Blend | 500 | 17.0 | 13.6 | 15.3 | 15.5 | 0.03 | 15.8 | Note: \*With the cheapest stocks or more volatile small-cap stocks, it's best to own ETFs that have more holdings. Returns are through Sept. 28. Five-, 10-, and 15-year returns are annualized. Volatility is a measure of standard deviation. N/A=not applicable Source: Morningstar Direct
market is misunderstood. “Capital One is the original and most successful fintech company,” he says. “It was started as a data science company and is run by data scientists. It’s in the top 10 of all companies for holders of AI patents and machine learning patents.”
Such a technological edge makes it a better credit-card lender than competitors, Davis argues. “Financial services companies are basically in the business of pricing risk,” he says. “The better you use information and data, the better you can price risk.”
Ben Shuleva:必需消费品的背景环境充满挑战。与可选消费类别不同(后者可以依赖前 10% 的消费者进行消费并驱动业务),前 10% 和后 10% 的消费者通常使用相同数量的卫生纸。因此,必需消费品公司真正需要的是广泛的消费者健康状况,而这正是我们目前所缺乏的。但这并不意味着该行业没有机会。
我们应该将必需消费品视为安全带:对于必需消费品而言,最佳的相对环境始终是其他领域处于糟糕环境之时。如今的整体市场在狭窄程度上很不寻常——无论是在市值还是在驱动经济增长的因素上。太多东西依赖于人工智能。如果我们对 AI 交易的任何担忧转化为真实、具体的挑战,你可以预见资金会转向避险,而必需消费品将从中受益。
The greater the real or perceived risk in a company, the more volatile the returns. Some might argue that for cheaply valued companies with some warts, it's better not to be so concentrated. Meb Faber typically holds 100 stocks in his deep-value ETFs Cambria Shareholder Yield and Cambria Global Value, which have been strong but volatile long-term performers. He argues that his ETFs differ greatly from most large-cap U.S. stock funds by holding smaller, cheaper, and often foreign companies.
“If you’re going to charge more than zero, you’d better be concentrated in different stocks,” he says. But holding 20 stocks in his style would “introduce a ton of variability” in returns.
Value stocks tend to have smaller capitalizations than growth ones because they have been beaten up. But any small stock can prove too volatile for extremely concentrated portfolios. Morningstar categorizes Paradigm Select as a mid-cap blend fund, but it has almost half of its 50-stock portfolio in small and microcap stocks. “I don’t want to be overconcentrated,” says Amelia Weir, who co-manages the fund with her mother, Candace Weir. “Sometimes you have to let your winners run, but I’d say 50 to 60 stocks” is ideal.
In a perfect world, no single position would get above 5%, Weir says. But one reason the fund is in the mid-cap range now is that its AI-related stocks like Lumentum Holdings and Marvell Technology have done so well, up 473% and 203%, respectively, in the past year. Lumentum is now almost 8% of the fund.
Therein lies the conundrum for a concentrated fund manager: You don't want to own too much in a volatile stock, but you never know if you might own the next Amazon. B
R itcoin funds won the third quarter, and bond funds lost—even as stocks kept going up.
Bonds are a portfolio's ballast, but their bête noire is rising interest rates,
which have surged because of inflation from the Iran war and years of deficit spending. The \$399 billion Vanguard Total Bond Market exchange-traded fund fell 3.4% in the quarter, just edging out the 3.5% average fund loss in Morningstar's intermediate core bond category. High rates and inflation are usually bad for stocks, too, although the S&P 500 index was up 2.3%.
Inflation at 3.4% isn't as bad as it was in 2022, yet the 10-year Treasury note yield recently crossed 5%, a level it hasn't seen since 2007. Meanwhile, 30-year mortgage debt rates have topped 7%, a rate which hasn't been typical since the 1990s, other than a few blips. Maybe the 1990s' dot-com bubble is instructive—high rates alone didn't stop that stock market freight train, either. Earnings misses, accounting scandals, a terrorist attack, and bankruptcies did.
Still, mortgage debt issuers with high credit quality are guaranteeing an annual return of 7%, and existing bonds that were issued at lower rates in the past are being sold off. The average fund in Morningstar's government mortgage-backed bond category fell 4% in the quarter, and the iShares MBS ETF lost 4.2%. Meanwhile, long-term bond funds, which are the most sensitive to rates, fell 6.9%. Interestingly, tax-free municipal bond funds fell more than traditional ones, in part because of excessive issuance.
Despite the poor performance, investors continued to add new money to bond funds in July and August,
especially the intermediate core category, which saw \$26.6 billion in new inflows, and the Vanguard Total Bond Market fund, which took in \$5.8 billion. (September asset-flow numbers weren't yet available.)
After a strong first half of 2026, small-cap funds of every category fell in the third quarter, the worst being small growth funds, down 9.6% on average. Small companies are more dependent on debt financing to grow, so rising rates hurt them more than large, well-established companies. The largest small-cap ETF, the \$103 billion iShares Core S&P Small-Cap, de-
clined 8% in the quarter after surging almost 20% in the previous one.
The worst-performing fund category in the quarter was utilities, down 11.6% on average. That's understandable, as utilities have bondlike dividend yields. But utilities are also the backbone of the artificial-intelligence data-center buildout, which requires massive amounts of energy. Virtus Reaves Utilities, which has an AI focus, had a bad quarter, down 13.9%. This could be either a buying opportunity for this fund or a warning sign for AI generally, depending on one's outlook.
There are also some interesting shifts in market leadership. While the average large blend fund was up 1%, and large growth, 1.2%, tech stock funds were down 2%, and healthcare ones were up 4.4%. Though the average large blend fund has a hefty 35% tech weighting, it also has 10% in healthcare stocks.
After years of being dead money, Big Pharma stocks like Merck and Johnson & Johnson came back strongly in the quarter. Merck was up 13.7% because of promising results for a new cancer vaccine that it partnered
The third quarter was bad for bonds and small-caps, but good for cryptocurrency, oil, and healthcare funds. | Fund / Ticker | Morningstar Category | Fund Assets (billion) | 3rd Quarter Return | YTD Return | Expense Ratio | Vanguard Total Bond Market / BND | Intermediate Core Bond | $399 | -3.4% | -2.8% | 0.03% | PIMCO Income / PONAX | Multisector Bond | 232 | -2.8 | -0.4 | 0.91 | Vanguard Information Technology Index / VGT | Technology | 171 | 5.2 | 33.8 | 0.09 | SPDR Gold Trust / GLD | Commodities Focused | 142 | 3.6 | -3.3 | 0.40 | Dodge & Cox Income / DODIX | Intermediate Core-Plus Bond | 110 | -4.2 | -3.4 | 0.41 | iShares Core S&P Small-Cap / IJR | Small Blend | 103 | -8.0 | 14.1 | 0.06 | Vanguard Intermediate-Term Tax-Exempt / VWITX | Muni National Interm | 89 | -5.1 | -3.4 | 0.17 | iShares Bitcoin Trust / IBIT | Digital Assets | 67 | 42.8 | -4.3 | 0.25 | iShares 20+ Year Treasury Bond / TLT | Long Government | 46 | -8.9 | -8.0 | 0.15 | State Street Health Care Select Sector SPDR / XLV | Health | 44 | 6.4 | 10.1 | 0.08 | State Street Energy Select Sector SPDR / XLE | Equity Energy | 40 | 16.3 | 40.1 | 0.08 | iShares MBS / MBB | Government Mortgage-Backed Bond | 36 | -4.2 | -3.3 | 0.04 | American Funds American High-Income / AHITX | High Yield Bond | 29 | -2.3 | -0.2 | 0.74 | VanEck Gold Miners / GDX | Equity Precious Metals | 27 | 16.5 | 2.1 | 0.51 | United States Oil Fund / USO | Commodities Focused | 2 | 37.9 | 110.5 | 0.86 | Virtus Reaves Utilities / UTES | Utilities | 1 | -13.9 | -10.1 | 0.49 | Breakwave Tanker Shipping / BWET | Commodities Focused | 0.2 | 423.1 | 4,000.6 | 3.50 | Note: Returns are through Sept. 30.
Source: Morningstar
with Moderna to develop. The share price for Moderna, which collapsed after Covid ended and more recently because of the current political administration's hostility toward mRNA vaccines, soared 175%.
This shift hasn't gone unnoticed. During the quarter's first two months, healthcare funds received \$3.8 billion in new investor money, reversing a negative trend in 2026. Though strong for the year, tech funds actually saw \$3.1 billion in outflows in August.
Yet the biggest winners by far were funds that invest in cryptocurrencies like Bitcoin. The \$67 billion iShares Bitcoin
Trust ETF was up 42.8%. The digital-assets fund category overall has behaved like a yo-yo this year, with the iShares ETF still down 4.3%. Despite the failure of the crypto-friendly Clarity Act to pass, crypto still rallied because President Donald Trump-aligned regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission stepped in with their own crypto-positive rule making. The fact that the Trump family has financial interests tied up with crypto doesn't hurt.
Also strong were commodities, particularly anything energy-related, because of the Iran war. The \$1.7 billion United States Oil fund, which invests in oil futures, was up 37.9% in the quarter and has surged 111% so far this year, with oil having recently crossed \$100 a barrel. The \$40 billion State Street Energy Select Sector SPDR ETF, which has 24% of its portfolio invested in ExxonMobil, gained 16.3%. Diversified commodities broad-basket funds gained 14.6% on average.
Continuing its crazy run, the \$190 million Breakwave Tanker Shipping ETF was the best-performing fund in the third quarter, surging 423% and up 4,001% for the year. It's the closest thing to a direct bet on the Iran war continuing as it invests in derivatives on crude-oil tanker freight rates. Since the Strait of Hormuz became perilous to navigate, freight rates have exploded.
Although they started the quarter strong, gold bullion and gold miner stock funds gave back some of their gains toward the end as the dollar strengthened on rising interest rates and amid an increased appetite for higher-yielding U.S. bonds. Investors may be on to something. B
THE ECONOMY
Consumer sentiment surveys paint a bleak picture right now, but spending remains brisk. Perhaps the problem lies with the surveys.
电子商务适用于高单价的轻量级产品。对于体积大且沉重的产品,很难让这种模式奏效。饮料的制造难度 [比包装食品] 更高,且分销是一个巨大的准入门槛。将零食摆上沃尔玛的货架,比让全国每家 7-Eleven 的冰箱里都有冷饮要容易得多。美国只有三大主要的全国性软饮料分销系统:可口可乐、百事公司和 Keurig Dr Pepper。
📄 Original Section
If Consumers Are So Down, Why Are They Spending So Freely?
When the going gets glum, the glum go shopping. That seems to be
the way of many Americans these days. Leading surveys of their moods show them to be down in the dumps about either the economy or their own financial conditions. But that hasn't stopped them from spending—far from it, in fact.
For months, the releases on the University of Michigan's consumer sentiment survey and the Conference Board's polling on consumer confidence have been drearily similar. The September UMich survey found the second-lowest reading in the polling's history, going back to 1952. The Conference Board's data, released this past Tuesday, was also downbeat, even lower than during the pandemic in 2020 and the worst since 2014.
Yet other news this past week showed that Americans' spending has remained robust despite their sour mood. Personal spending was much stronger than expected in August, the Commerce Department reported, vaulting some $0.9\%$ .
The final release of second-quarter gross domestic product showed an upward revision to a 2.2% inflation-adjusted annual rate of growth, up from 1.5% previously reported. That mainly reflected a revised gain in personal spending, to 3.8% from 3.2%. Overall GDP growth was held down by spending for imports and a drawdown in inventories. Stripping away those factors, domestic final sales grew at a robust real 3.9% annualized, a substantial acceleration from the preceding two quarters' 2.4% and 0.5%, respectively.
BY RANDALL
W. FORSYTH
The easy answer to the disconnect between downbeat sentiment and robust spending is the so-called K-shaped economy. The vast disparity among Americans' incomes and wealth ought to end the dopey statements by TV talking heads about “the consumer” (but probably won’t). A widely cited study last year by Moody’s Analytics found that the highest-earning 10% of households accounted for nearly 50% of total spending.
Those wealthy cohorts also have the most assets, such as stocks and residential real estate, the appreciation of which has further supported their ability to spend. The top 10% of
U.S. households gained \$38.2 trillion in wealth in the year ended on June 30, according to recently released Federal Reserve data, as the S&P 500 index rose 21% over that span.
But that doesn't fully explain growth in spending. A report by Bank of America economists Shruti Mishra and Aditya Bhave released this past week found increased breadth in consumption, with a narrowing in “K-shaped spending dynamics” combined with a pickup in spending among less well-off households. That's based on the bank's aggregated credit-and debit-card numbers. They estimate that third-quarter spending grew at close to a 3.5% real pace, nearly matching the previous quarter's showing.
The BofA economists found that surging equity wealth pushed household assets to more than 10 times their liabilities, which they said provided a “continued tailwind for spending.” Those gains weren’t just in rich folk’s stock portfolios. Liquid assets such as bank deposits and money-market funds, which are probably more evenly distribution across the population, also are elevated versus liabilities. The economists warned, however, that a shakeout in artificial-intelligence stocks, higher long-term interest rates, or a more significant oil-price shock could pose a potential risk to spending.
That we're less happy than we used to be probably qualifies as a “No s—, Sherlock” observation. But these consumer surveys still are followed as indicators of future spending. Indeed, average consumer expectations for business conditions are one of the components of the Conference Board's Leading Economic Index, along with redoubtable measures such as new orders, building permits, and financial conditions.
The problem is, feelings don't matter much anymore, at least not as indicators of the economy. B
Keurig Dr Pepper 的情况则更为复杂。该公司在 4 月完成了对 JDE Peet's 的收购,并利用此次收购打造一个增强的咖啡业务,该业务将于 2027年初分拆。这项待定交易涉及许多与交易相关的复杂性,使得投资者难以理解其业务并为股票定价。但这也就意味着机会。该股估值具有吸引力,且前景中有可识别的催化剂。[Keurig Dr Pepper 的交易价格约为远期收益的 13 倍。]
📄 Original Section
Downbeat Sentiment, Upbeat Spending
Note: seasonally adjusted annual rate in 2017 dollars.
Consumer Spending (trillion)
Widely followed surveys show that consumer attitudes have been depressed despite a good economy and stock market. That hasn't slowed down spending.
So, what really explains the evident split between the consumers' moods and their spending? Part of the answer may lie in the survey methods. Piper Sandler's economics team, led by Nancy Lazar, contends that its proprietary survey, which polls 500 different people nightly, versus 3,000 a month by the Conference Board and UMich's 1,000 a month, tracks historical spending better than those surveys. Recently, the Piper Sandler polling has shown people to be more upbeat and in sync with their spending than in the other surveys.
More broadly, the big economic sentiment indicators may have become unmoored from the actual economy. After all, they've been falling even with low unemployment, solid growth, and a record stock market. According to a recent report by Goldman Sachs economist Joseph Briggs and Sarah Dong, people's happiness deteriorated sharply in 2020 and hasn't recovered in tandem with the economy and the stock market. And that extends across all cohorts and political partisans, and among homeowners and renters alike.
Citing a paper from University of Chicago economist Sam Peltzman, the Goldman report said people have become more downbeat on the state of the world for reasons unrelated to the economy. That paper found that a decline in confidence in nearly all societal and government institutions since 2016 more than offset an improvement in finances. The sentiment surveys may reflect that general decline more than shifting views about the economy. Reps for the Conference Board and UMich surveys couldn't be reached.
The S&P 500 Consumer Staples stock index has returned more than 7% year to date, well ahead of its 3.9% gain for all of 2025. But the recovery has been wildly uneven.
Target shares have surged 60% this year, and Coca-Cola has gained 24%. Meanwhile, Cheerios maker General Mills and Campbell's, known for its canned soup, have both fallen about 27%.
The divergence creates opportunities for stockpickers like Ben Shuleva, consumer-sector leader at Fidelity Investments and co-manager of the Fidelity Select Consumer Discretionary Portfolio and Fidelity Select Consumer Staples Portfolio, with combined assets of about \$2 billion. Shuleva has managed the Consumer Staples fund since 2020. It returned 14.5% in the first eight months of 2026, outperforming the 9.9% gain in its sector benchmark, the MSCI US IMI Consumer Staples 25/50 Index.
Barron's spoke with Shuleva on Sept. 25 about how consumer spending trends, GLP-1 drugs, commodity inflation, and artificial intelligence are affecting staples stocks, and which names he finds most attractive. An edited version of the conversation follows.
Barron's: Consumer-staples stocks have been struggling. What could brighten this picture?
Ben Shuleva: The backdrop for staples is challenging. Unlike discretionary categories that can rely on the top 10% of consumers to spend and drive the business, the top 10% and bottom 10% of consumers generally use the same amount of toilet paper. So, the staples companies really need broad consumer health, and that isn't something we have today. But this doesn't mean there aren't opportunities in the sector.
We should think of staples as a seat belt: The best relative environment for staples is always a terrible environment elsewhere. Today's broader market is unusual in how narrow it is—both in market cap and what is driving the economic growth. So much is dependent on artificial intelligence. If any of the fears we have for the AI trade turn into real, concrete challenges, you would expect a flight to safety, and staples would benefit.
How will staples companies deal with elevated energy costs and commodity inflation?
Staples companies buy commodities and sell brands to capture the spread in between. Given persistent inflation, the cost side of the equation has gotten much worse, and companies will have to raise prices to manage margins. But consumers have been eating higher inflation for five to six years and volumes are already weak, so it's going to be challenging.
“[Coca-Cola] stock is up, but it still trades at a pretty big discount to some of the other best-in-class consumer companies.”
phisticated price-pack architecture to manage demand elasticity, which means keeping the same price points but offering smaller pack size. Many companies are already doing it. If oil stays at this level, many companies will have to make harder decisions over the next 12 to 18 months—decisions like rationalizing production capacity and closing plants—to improve productivity.
On the one hand, barriers to entry are coming down. AI can help new entrants go to market faster, with smarter and better content. On the other, leading companies use AI to bring innovation faster and save money.
We need to approach the question of AI's impact with humility and acknowledge that the outcome we predict today is highly uncertain. Twelve months ago, OpenAI launched instant checkout for ChatGPT and announced partnerships with retailers such as Walmart and Shopify. At the time, this was expected to catalyze AI disruption of retail. Just six months later, OpenAI said it would allow merchants to use their own checkout.
The risk I see is a change in how consumers discover products. When you shop on a retailer's website, you're shown sponsored products, recommendations, and advertisements throughout the purchasing process. Retailers monetize that activity at every stage.
When that product discovery occurs off-site or via an AI agent, the retailer doesn't engage directly with consumers and generate first-party data. Instead, it acts primarily as a fulfillment mechanism, and the funnel—be it ChatGPT, Claude, or Muse—is more in control of the higher-value piece of that transaction.
Without advertising, the e-commerce model doesn't really work. Even at Amazon.com, the majority of retail operating profit comes from advertising.
Could the use of GLP-1 weight-loss treatments hurt food-and-beverage demand long term? I have described the potential disruption from GLP-1s as both big and
small. The percentage of GLP-1 users is about 10% of the U.S. adult population, and it is growing as lower-priced options have become available. But the impact on food-and-beverage companies is probably less than we think. If we assume another 25 million Americans start taking GLP-1 drugs over the next five years and each reduces calorie consumption by 20%, that would translate into roughly a 30-basis-point annual drag on total U.S. calorie consumption. [A basis point is a hundredth of a percentage point.]
You have been fairly bullish on the beverage industry. Does the industry have a structural advantage over other staples markets? Consumer brands are living in an age of disruption. The barrier to entry has come down. New forms of advertising allow brands to target a hyper-specific segment of consumers with high conversion rates and direct feedback, while e-commerce eliminated the space constraints of bricks-and-mortar retail that favored large incumbents. This has been fueling the growth of many emerging brands.
E-commerce works well for lightweight products at a high price point. It is hard to make the model work for things that are bulky and heavy. Beverages are harder to manufacture [than packaged food], and distribution is a significant barrier to entry. It is much easier to get a snack on shelves at Walmart than have a cold beverage in a fridge at every 7-Eleven across the country. There are only three major national soft-drink distribution systems in the U.S.: Coca-Cola, PepsiCo, and Keurig Dr Pepper.
Coca-Cola and Keurig Dr Pepper are both top holdings in your fund. What makes them attractive? Coke is still robust. It's one of the highest-quality consumer companies in the world. It's winning in durable ways in a very advantaged category. The distribution advantage of Coke is even greater internationally. Just as an example, I climbed Mount Everest in 2022. On the hike up to base camp, you pass these local tea houses, and every tea house sold Coke and Sprite. The stock is up
[Coca-Cola shares rose more than 30% in the past year], but it still trades at a pretty big discount to some of the other best-in-class consumer companies such as Walmart, Costco Wholesale, and Marriott International. [Coke trades for 25 times the next 12 months' expected earnings.]
Keurig Dr Pepper is a more complex story. The company completed its acquisition of JDE Peet's in April, and is using that purchase to create a beefed-up coffee business that will be spun out in early 2027. There is a lot of deal-related complexity with that pending transaction, which makes it hard for investors to understand the business and price the stock. But that means opportunity. The stock has an attractive valuation, and there is an identifiable catalyst on the horizon. [Keurig Dr Pepper is trading for about 13 times forward earnings.]
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📄 Original Section
Constellation Brands and Diageo have suffered from a decline in alcohol sales. What is the investment outlook now?
This year has been another disappointment. Expectations were high going into the year because poor weather and weak demand from lower-income and Hispanic consumers had hurt sales in 2025, setting a relatively easy bar for year-over-year growth. We also had the World Cup and America's 250th birthday this year. The hope was they would drive an inflection in alcohol volumes, but that hasn't happened.
Some of the structural headwinds are here to stay, and alcohol companies need to adapt. Diageo just hired a new CEO, and recently announced steps to cut costs and get lean. It is using the savings to reinvest in both the brands and price points.
Constellation has continued to gain market share in U.S. beer. It also has a new CEO, and I'm eager to see how he approaches this new reality in alcohol.
You have cited the structural challenges facing the packaged-food industry. Yet, Mondelez International has been a top holding. What separates it from peers? Mondelez competes in more-indul-
gence-based categories such as chocolates and cookies, where brands and taste matter more to consumers and the barriers of entry are higher. When people want a chocolate cookie with cream inside, they buy Oreos. That's why private labels are far less penetrated in these categories than in the rest of packaged food.
Also, Mondelez has a lot of emerging market exposure. It isn't exposed only to slowing U.S. population growth and shrinking per-person calorie intake. The company has a huge business in India, the rest of Asia, and Latin America—all faster-growing markets than the U.S.
Mondelez has a lot of exposure to cocoa prices, which nearly quintupled from their 2022 lows to an early-2025 peak. That squeezed the company's margins and hurt its volumes. But high prices have been destroying demand and incentivizing supply, and cocoa prices are already down.
Target is another of your top holdings. Is the retailer's turnaround working?
Retail sales growth has become increasingly concentrated among a handful of major players, including Walmart, Costco, and Amazon. But there is still plenty of room to carve out a niche in retail if you know what sets you apart and execute well.
Target made several mistakes in the past three years and drifted away from what it did best. Recently, the company made some material changes to its management team. Target refocused its strategy, and there are early signs of success. Same-store sales have inflected hard lines. The toy business is growing by double digits. Target is pushing hard into beauty. The retailer is crushing it in niche categories like trading cards and has set up partnerships with viral brands such as Roller Rabbit and Pokémon.
The company is starting to find its magic. The stock has moved up in the past year, but the company is only two quarters into the turnaround, and sales and margins are still depressed relative to history.
Thanks, Ben. B
TECH TRADER
Semiconductor maker Micron Technology isn't receiving the support from investors it deserves following another stellar quarter.
与此同时,顶级经纪公司 Coinbase Global 的股价在过去三个月上涨了 11%,而 Michael Saylor 的 Strategy 公司自 7 月初以来飙升了近 60%,因为该公司在最近几周恢复了比特币的购买。
Corgi Invest 的首席投资策略师 Jeff Weniger 指出,比特币和加密货币股票的上涨与过去几个月推动“七巨头”、网络安全股和其他科技股上涨的“风险偏好”行情同步。Coinbase 是该公司新推出的 Corgi Crypto Infrastructure ETF 中持仓最大的资产。该基金还持有 Robinhood Markets、比特币矿企 BitMine Immersion Technologies 和 Hut 8,以及稳定币发行商 Circle Internet Group 的头寸。
Micron's Stock Is Cheap. Why Investors Are Still Gun-Shy.
n Wednesday, memory-maker Micron Technology reported another beat-and-raise quarter, with 379%
sales growth and an astounding 87% gross margin. But the stock went down initially before rising 3%.
Come Thursday morning, my inbox was full of questions that all boiled down to, “What gives with this stock?”
Micron stock is trading at only 6.4 times its projected earnings this fiscal year, which began a month ago, well below either the S&P 500 or PHLX/semiconductor, or SOX, indexes. It is particularly strange when held up against the Wall Street analyst consensus estimate for earnings growth of 126% in fiscal 2027.
More than any other tech stock, trading in Micron is about psychology, and all the abnormally large numbers in the world can't overturn some long-held beliefs. The stock has become a battleground between “this time is different” and “no, it isn’t.”
Single-digit forward price/earnings ratios are nothing new for Micron. Over the past 10 years, 54% of days saw its P/E under 10, and 27% were lower than today.
It all stems from the commoditized nature of the memory business. There have been wild swings in inventories and prices, which get reflected in Micron's financials as sharp fluctuations in sales growth and gross margins.
Micron has been subject to a phenomena known as the bullwhip effect.
BY ADAM
LEVINE
First identified by Massachusetts Institute of Technology business school professor Jay Forrester in 1961, the bull- whip effect is that the further upstream a supplier is from the end-user sale, the less visibility it has into demand, and the wider the oscillations are in inventories and, consequently, prices.
During the last cycle—from 2019 to 2023—most of Micron's sales were to consumer-electronics and vehicle manufacturers. These products go through multiple distribution layers after the memory leaves Micron's warehouses, and the demand signals get more opaque with each step.
In the last go-round, the inventory situation was further complicated by the supply-chain chaos and fierce
consumer goods demand during the Covid pandemic lockdowns. When that demand flagged, it was just as new memory manufacturing capacity was ramping up.
Inventories at Micron and its customers shot up, and prices collapsed. With sales contracting and inventory write-downs piling up, Micron had a negative gross margin in all the calendar-2023 quarters.
The stock peaked in early 2022, just a few weeks after Micron reported its first fiscal quarter of that year, which saw slight declines in sales growth and gross margin. Micron's forward P/E was 9.7 that day, not much higher than it is today. The S&P and SOX indexes both had P/Es that were more than double Micron's, the same as today. Even in the cyclical chip business, Micron and the other memory makers are a special case.
The old Wall Street maxim played out: The best time to buy cyclical chip stocks is when things go from horribly bleak to merely awful, and the best time to sell is when growth and margins are peaking. Many tech investors still feel pangs of regret from a cycle they mistimed, and have either sworn off the stock or are ready to jump ship at any sign of a cycle peak.
For those so inclined, they got that
Many tech investors still feel regret from a cycle they mis-timed, and have either sworn off the stock or are ready to jump ship at any sign of a cycle peak.
signal with Micron's guidance for the first quarter, with projected slight declines in earnings growth and gross margin. Déjà vu all over again.
But a lot has changed in the memory market since that last cycle. Memory is still a commodity product, but it is also one of the key chokepoints in the generational investments into AI data centers, which show no signs of slowing down.
Micron and its peers—SK Hynix and Samsung Electronics—were initially reluctant to invest new capital to meet data-center demand, and new manufacturing capacity isn't expected to begin providing supply-side relief until the middle of next year, with more slated for the following years.
Instead of riding fickle consumer demand, now data-center customers predominate, representing 63% of sales in the fourth quarter, rising from about a quarter of revenue in the last upcycle. There are fewer layers of distribution between Micron and the end customer in this market, and Micron has better demand signals. In this week's earnings call, CEO Sanjay Mehrotra said that fiscal 2027 would have an even tighter market for memory than 2026, with more price increases, and that the following year would be tighter still. "We do not have a line of sight to when supply and demand will get in balance," he said.
The stock was unmoved by that declaration. Micron has its best visibility ever into what long-term demand looks like. Like its competitors, Micron is using the extraordinary market power it has to push customers into five-year agreements with price floors and high price ceilings, and take-or-pay terms. Micron now has 26 of these contracts which constitute over a third of sales through 2030. The more it can add to that, the softer an eventual downcycle will be.
And that may be what it takes to convince some investors that Micron is worth more than a single-digit valuation multiple: a downcycle in which the average sales price doesn't collapse, revenue doesn't crater, and gross margins bottom at respectable levels. If Mehrotra is right, that may be years off. B
September 28 through October 2, 2026 | International Trader | P. 32 | Striking Price | P. 33 | Inside Scoop | P. 34 | 13D Filings | P. 34 | Winners & Losers | P. 35 | Market View | P. 36 | Statistics | P. 37 | ---
“根据我们目前掌握的信息,明年延续现状的可能性大于变革,”瑞银全球财富管理(UBS Global Wealth Management)新兴市场首席投资官阿莱霍·切尔翁科(Alejo Czerwonko)表示。基于这一假设,阿根廷债券值得买入。“尽管阿根廷拥有全球最健康的财政状况之一,但其交易价格相对于其他 B 级信用债仍有较高溢价,”切尔翁科认为。
米莱的改革仍可能失败,就像之前的毛里西奥·马克里(Mauricio Macri)那样。但投资者可能已经获得了足以覆盖该风险的报酬。 B
📄 Original Section
The Market Looks Ahead to Earnings Season
et out your trust
rope and harness.
Investors are once
again climbing the
proverbial wall of
worry—and earn-
ings season could
provide the piton that supports the stock market's next move higher.
By PAUL R.
LA MONICA
Really, the stock market shouldn't be holding up as well as it is. Oil prices remain persistently high, bond yields keep rising, and the Federal Reserve's next interest-rate hike remains a question of when, not if.
And yet the Nasdaq Composite gained 0.5% this past week, while the S&P 500 index dipped 0.3%. Only the Dow Jones Industrial Average, off 1.3%, suffered a healthy drop.
The market found reasons to hold up amid the economic data. A weaker-than-expected September jobs report, particularly slowing wage growth, helped soothe some investor concerns about inflation and interest rates, as the chance of the Fed raising rates in October and December tumbled on Friday. But optimism about corporate profits is lifting Wall Street's mood, too.
“We’re clearly in a higher inflationary environment,” says Marc Pinto, head of Americas Equities at Janus Henderson. “So, the question people have to wrestle with is, ‘What do we need for stocks to keep moving higher?’ The answer is earnings growth.”
So far, so good. Earnings might hold the answer for the stock market's remarkable resilience. Micron Technology's blockbuster report on Sept. 30 gave the market a glimpse of what is yet to come. The memory chip leader's results on guidance are a sign that spending on artificial intelligence is continuing at a robust pace. Investors will get a further glimpse at how companies fared in the third quarter this coming week, when Constellation Brands, Levi Strauss, PepsiCo, and Delta Air Lines release results. The market will be keeping an eye on these companies for clues about whether consumers continue to spend despite all of the pressure from rates and oil.
Earnings guidance will be key. Earnings for the S&P 500 index are currently expected to rise more than 25% in the fourth quarter, and 2027 earnings are forecast to increase 16%
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Special quarterly listings in WSJ & Barron's from 2026 levels, a slowdown from this year's estimates of more than 30% profit growth but still impressive. Joshua Wein, a portfolio manager at Hennessy Funds, said it's “hard to imagine earnings falling off a cliff in the fourth quarter and 2027.”
And it may be Big Tech's turn to shine. Of the Magnificent Seven, just three names—Apple, Meta Platforms, and Nvidia—have risen more than 10% this year. Tesla, meanwhile, has dropped, while Alphabet, Microsoft, and Amazon.com have posted single-digit gains. That has resulted in a group that now looks cheaper than it did at the start of the year: The Roundhill Magnificent Seven exchange-traded fund trades at 25 times earnings forecasts for the next 12 months, down from 32 times at the start of the year.
“We're overweight in large-caps and the megacaps, in particular,” says Todd Jablonski, global head of multi-asset and quant strategies at Principal Asset Management. “It's about minimizing volatility.”
So, leave the worrying to the other guy and enjoy the climb.
Do we call it a comeback? Cryptocurrencies enjoyed a renaissance in the third quarter. Bitcoin soared more than 40%, while Ethereum surged more than 70%. The rebound for digital assets may have only just begun.
Even after their stellar summer performance, Bitcoin and Ethereum prices both remain lower for the year. Citigroup research strategist Alex Saunders doesn't expect that to last much longer. He raised his base case 12-month price targets at the end of September to \$113,000 for Bitcoin, nearly 35% higher than its current level, and \$3,028 for Ethereum, more than 13% above where it's now trading.
His rationale? The increased pace of Treasury bond buybacks in recent months could eventually lead to lower long-term interest
rates and a weakening of the dollar, even though yields and the greenback have continued to march higher. Cryptos tend to benefit from the currency debasement trade.
Saunders also argues that the Securities and Exchange Commission's decision to step up with some favorable rules for cryptos in the wake of the Senate's failure to advance the crypto-friendly Clarity Act should give digital assets a further boost. “Durable legislation would likely offer greater policy clarity than agency-led rule-making, but the industry has taken the view to build now... and to create entrenchment that would be difficult to dismantle,” he wrote.
Retail investors are also taking advantage of the crypto resurgence to buy crypto ETFs as well as stocks with exposure to the Bitcoin boom. According to data from Coin-MarketCap Research, U.S. spot Bitcoin ETFs posted eight consecutive sessions of net inflows at the end of September. That has helped boost iShares Bitcoin Trust, Fidelity Wise Origin Bitcoin, Grayscale Ethereum Staking, and other funds.
Meanwhile, shares of top brokerage firm Coinbase Global are up 11% in the past three months, while Michael Saylor's Strategy has skyrocketed nearly 60% since early July as the company has resumed purchases of Bitcoin in recent weeks.
The rally in Bitcoin and crypto stocks has coincided with a “risk on” rally that has lifted the Magnificent Seven, cybersecurity stocks, and other tech names in the past few months, noted Jeff Weniger, chief investment strategist at Corgi Invest. Coinbase is the largest holding in the firm’s newly launched Corgi Crypto Infrastructure ETF. The fund also has positions in Robinhood Markets, Bitcoin miners BitMine Immersion Technologies and Hut 8, and stablecoin issuer Circle Internet Group.
“Bitcoin and other pieces of the crypto atmosphere turned on a dime over the summer and went vertical,” Weniger said.
Performance of the Dow Jones U.S. Industrials, ranked by weekly percent change.\*
Source: S&P Dow Jones Indices
ebullient mood for crypto could once again sour. But given that Bitcoin and stocks in the digital asset universe have rallied despite higher interest rates and a big legislative setback, it's hard to bet against that short-term momentum. The Bitcoin bulls have once again taken charge.
科恩于 late 2020 开始收购 GameStop 股票,他的买入行为一直能为该股提供助力,而该股的交易很大程度上依赖于情绪和炒作。根据道琼斯市场数据(Dow Jones Market Data),在他的买入之后,该股在随后的交易日中平均上涨 7%。B
📄 Original Section
A Memory ETF Gets a Boost
Micron, one of the world's leading memory chip makers and a poster child for the artificial-intelligence stock rally, reported earnings on Wednesday afternoon that topped forecasts. That should be good news for the Roundhill Memory ETF, one of the most successful ETF launches of all time.
The ETF, which traders often refer to by its ticker symbol DRAM, has come far since its early April debut, attracting \$26.6 billion in assets under management in its first six months. But the risks are high for the popular fund—thanks to its high concentration in Micron and a few other volatile stocks, questions about AI demand, and the growing number of competing funds.
Micron is the actively managed fund's largest holding, with a more than $26\%$ weighting, while South Korean rivals Samsung Electronics and SK Hynix make up the second- and third-largest positions. Combined, these three stocks account for nearly three-quarters of the fund's assets. That means there was a lot riding on Micron's results for the ETF.
DRAM's price has more than doubled since it launched, but is still nearly $25\%$ below its all-time high from June. That makes the fund even more volatile than the broader iShares Semiconductor ETF, or SOXX, which has Micron as its third-largest holding. The SOXX is about $10\%$ below its 52-week high.
Dave Mazza, CEO of Roundhill Investments, told Barron's that he isn't concerned about the big swings in memory stocks.
“Memory remains a compelling opportunity from a valuation standpoint,” Mazza said. “And while volatility comes with the territory, the flows we’ve seen during pullbacks suggest investors are treating them as entry points.”
He has a point on valuation. The DRAM ETF currently trades for just five times earnings estimates for the next 12 months, down from a peak valuation of 10 times earnings in June. This is also a much lower multiple than that of the S&P 500, which trades at 19 times earnings estimates.
Still, Micron and other memory chip companies have historically been highly cyclical. They often look cheap near a top—when they are in boom times and generating strong earnings. The question is how much longer this robust growth can last.
That's a question facing investors in several copycat memory ETFs that have launched since then, too, such as Tuttle Capital Concentrated Memory Stack, Kurv Memory Select, and Tema Memory. The Tuttle fund focuses more on picks-and-shovels plays that benefit from rising capital expenditure related to AI, such as chip and testing equipment companies and infrastructure firms like Advantest, Onto Innovation, and Penguin Solutions. The Kurv ETF leans heavily on the South Korean leaders, with more than $20\%$ of its assets in SK Hynix and another $7\%$ in Samsung. The Tema ETF has flash-memory company Sandisk, SK Hynix, and Japan's Kioxia Holdings as its top three holdings, which collectively make up a little more than half of its assets.
These smaller memory-focused ETFs could get a big lift if Micron's stock resumes its explosive rally and the rest of the tech sector follows suit. But so would DRAM.
The strong results from Micron could be the catalyst to reignite the memory chip rally and get DRAM back on track. B
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Argentine President Javier Milei is losing momentum a year before his bid for re-election. Luckily for him and bondholders, his Peronist opponents are stuck in reverse.
The libertarian firebrand, in office since December 2023, achieved global celebrity as his shock therapy whipped near-hyper-inflation and doubled currency reserves in the world's most-defaulting nation. But he has largely squandered a political boost he got from successful 2025 midterm elections.
At home, Milei's drawn-out defense of cabinet chief Manuel Adorni against corruption allegations left vital structural reforms of taxation and pensions to languish. "The Adorni scandal consumed way too much oxygen," says Bruno Binetti, a fellow at Chatham House. Adorni stepped down in late June.
Abroad, Milei's administration whiffed on a chance to re-enter bond markets before the summer surge in global yields. "If they didn't want to issue at 9%, they won't come to market now at 11%," says Jeff Grills, head of emerging markets debt at Aegon Asset Management.
That has left the economy to drift in the wrong direction for most of Argentina's 46 million citizens. Inflation is stuck around a still-punishing $30\%$ annual rate. Poverty is increasing again after a sharp contraction in Milei's first two years.
This year's $2\%$ to $3\%$ economic growth is concentrated where jobs aren't, in oil and mining exploration and agriculture. "Real wages are stagnant, and unemployment is rising," summarizes Thierry Larose, portfolio manager for emerging markets local debt at Vontobel Asset Management.
Milei's poll numbers have dropped accordingly, with voters disapproving of his stewardship by a 60-to-40 margin, according to pollster AtlasIntel. So have bond prices. Benchmark paper maturing in 2038 fell from 83 cents on the dollar to
Argentines may well see the alternative as worse when they cast ballots in October 2027, though. Peronism's leading lights, former President Cristina Kirchner and Buenos Aires Province Gov. Axel Kicillof, have feuded with each other and rehashed the disastrous policy prescriptions that ushered Milei into power. "The Peronists are very nostalgic about a golden age that disappeared more than 15 years ago," says Binetti.
“With the information we have today, continuity is more likely than change” next year, says Alejo Czerwonko, chief investment officer for emerging markets at UBS Global Wealth Management. On that assumption, Argentine bonds are a buy. “They are trading at a steep premium over other B-rated credits despite one of healthiest fiscal situations on the planet,” argues Czerwonko.
Aegon's Grills is a tad more cautious, seeing Argentine credit as “not too far from an entry point.” Yields are near, if not at the top of, the emerging market charts, paying a percentage point more than neighboring Ecuador and nearly as much as Gabon, he notes. Vontobel's Larose considers “the outlook for Argentine bonds as challenging but potentially attractive.”
Stagnation might get incumbents thrown out in other countries. In Argentina, it's something of an achievement compared with past chaos and contraction. "Milei is delivering a modicum of stability in the ultimate boom-and-bust economy," Czerwonko says.
Milei has powerful friends to buttress that stability if necessary, at the International Monetary Fund and the U.S. Treasury, which opened a \$20 billion credit line to Buenos Aires to fortify the peso before last year's midterms.
Milei's reforms could still fail, like those of Mauricio Macri before him. But investors may be getting paid adequately for that risk. B
If the 10-year U.S. Treasury yield remains above 5%, millions of people who rely on stock-generated income to pay their living expenses could grow worried. But fret not—the options market offers a way out.
The effects are already being felt. The ProShares S&P 500 Dividend Aristocrats exchange-traded fund (ticker: NOBL) is down about 3.6% since the 10-year Treasury closed above 5% on Sept. 15 for the first time since 2007. The State Street Utilities Sector SPDR ETF (XLU), also favored by dividend seekers, has also lost 3.6% over the same period.
A deeper decline in the stocks is possible if the Federal Reserve increases interest rates again, as is expected. Higher bond yields could alarm retirees with low thresholds for market volatility and an overreliance on dividends. Dividend stocks are highly sensitive to interest rates because they compete with bonds. When bond returns increase, dividend stocks tend to decline, as their payouts look less attractive.
Dividends might remain stable, but investors could panic when they see the value of their portfolio fall—and companies could cut dividends, or limit increases, as a rising-rate environment increases debt expenses.
The utility sector, for its part, has attracted enormous trading interest—and it doesn't seem to bode well. Bearish short selling on the Utilities ETF was the most active in about six years, per Goldman Sachs data, even as upside call option buying was recently at the highest levels in a year. While some traders point to the call activity as a bet on an XLU rebound, or a short squeeze, our read is that investors short XLU bought calls—which increase in value when stock prices rise—as a hedge.
Too few Americans have enough saved for retirement. They have been forced to own more stocks than recommended for their age to maintain their standard of living. They have high portfolio risk at a stage of life that historically was defined by conservative, bond-heavy portfolios.
If yields keep rising, bonds will become competitive with stocks and millions of retirees could see something that is a rarity in the past 30 years: the failure of stock prices to snap back after a decline in value. Many will likely sell equities if they can finally get higher, and safer, bond returns.
Two strategies are relevant.
Aggressive investors can wager against the Dividend Aristocrat ETF, which, at \$54.30, is below its 20-day simple moving average of \$55.61—a fact that attracts bearish traders like sharks to chum.
With the ETF at current levels, buy the November \$54 put to profit from a decline. The trade costs about 95 cents, but trading volumes are light. At \$50, the put is worth \$4, and the value will continue to increase if the fund tumbles.
Dividend-reliant investors, for their part, can buttress their positions by selling calls on stocks or ETFs, which creates what we call “conditional dividends” that often exceed common stock dividends.
With the State Street Utilities ETF at \$39.83, the December \$42 call could be sold for about 67 cents. If the fund is below \$42 at expiration, the call premium is kept. XLU yields about 3%, and it pays an annual dividend of \$1.21. The strategy risk is if XLU exceeds the strike price, requiring investors to buy the call at a loss, or to adjust it to avoid assignment.
Options income is taxed at personal income rates when generated by a short-term options strategy. Qualified dividend income is taxed at an attractive 15% rate. In addition, selling a call obligates an investor to sell stock if the stock price exceeds the strike price. To avoid that, the call can be adjusted, or rolled, to another expiration.
A proactive approach is smart since dividend stock tremors could worsen, prompting more investors to seek the relative safety of bonds over the risks of stocks. B
If yields keep rising, retirees could see something that's been a rarity in the past 30 years: the failure of stocks to snap higher after a decline in value.
Equity Options
Skew indicates whether the options market expects a stock-market advance or decline. It measures the difference between the implied volatility of puts and calls that are 10% out of the money and expire in three months. Higher readings are bearish.
Meta Platforms executives including CEO Mark Zuckerberg sold over \$50 million of company stock in recent weeks as buzz erupted around the company's Muse AI agent.
On Sept. 24, two entities controlled by Zuckerberg executed a series of stock conversions and multimillion-dollar share sales. First, CZI Holdings, a private wealth holding vehicle, converted 17,140 Class B shares into publicly traded Class A common stock on a one-for-one basis.
That same day, Zuckerberg sold 27,474 total shares for over \$21.3 million. The sales were conducted indirectly through CZI Holdings as well as the Chan Zuckerberg Biohub, a nonprofit research organization. Both entities were co-founded by Zuckerberg and his wife, Priscilla Chan,
GameStop's Cohen Makes His Third Buy In Less Than a Month
GameStop CEO Ryan Cohen's multimillion-dollar stock buying spree shows no signs of slowing down.
and are tied to their broader philanthropic organization, the Chan Zuckerberg Initiative.
A separate filing shows that Chief Operating Officer Javier Olivan sold 1,575 shares for roughly \$1.2 million on Sept. 28. Most of the shares were sold directly, with the remainder sold indirectly through limited liability companies and a family trust. Olivan executed the sales under a trading plan he adopted on Nov. 17, 2025.
The transaction marked Cohen's third major stock purchase since the start of September. Cohen acquired \$20.4 million in company shares on
A filing with the Securities and Exchange Commission shows that Cohen purchased 450,000 shares for nearly \$10.6 million on Sept. 29, bringing his direct holdings to just over 40.9 million shares. That stake represents roughly $8\%$ of GameStop's shares outstanding.
The transactions were executed under a prearranged trading plan that Zuckerberg adopted on Jan. 31, marking his first stock sales since August 2025, according to filings with the Securities and Exchange Commission.
Chief Product Officer Christopher Cox made an even bigger sale, disposing of 40,000 shares for \$28.5 million on Sept. 21. The sales were made indirectly through a revocable trust in his name.
Sept. 10, followed by an additional \$26.3 million on Sept. 21.
While the CEO and GameStop have remained tight-lipped about the thinking behind his recent purchases, Cohen remarked earlier this year that it was “essential” for chief executives of public companies to buy stock “in order to further strengthen alignment with stockholders.”
Now in his third year at the helm, Cohen has driven aggressive cost-cutting and turnaround efforts to nudge the firm toward profitability.
Cohen began acquiring GameStop stock in late 2020, and his purchases have consistently provided a boost to the shares, which trade heavily on sentiment and hype. Following his buys, the stock has gained an average of 7% in the following trading session, according to Dow Jones Market Data. B
对于 AI 交易而言,煤矿里的金丝雀将是那些在数据中心投入巨资的公司。如果它们的股价下跌或公司信用利差大幅扩大,它们将面临削减预期投资的压力。这将拖累其供应商(半导体制造商、工业公司等)的股价。
对美国利润增长和 AI 支出的预期是不切实际的,且其修正速度将快于大多数人的预期。
—Arthur Budaghyan
📄 Original Section
Activist Filings
Group 1 Automotive (GPI)
Conifer Management raised its stake in the automotive retailer to 1,840,698 shares. Conifer Management did so through the purchase of 478,058 Group 1 Automotive shares from Sept. 9 through Sept. 29 at per share prices ranging from \$235.11 to \$286.58. On Sept. 21, Conifer entered into a stockholder agreement with the company, pursuant to which Group 1 Automotive agreed to expand its board to 11 members and appoint Conifer analyst Benjamin Hart as a director effective on Nov. 1, and Conifer agreed to a standstill capping its ownership at 19%. Following the latest purchases, Conifer owns a 15.4% stake in Group 1 Automotive's outstanding stock. Shares of Group 1 Automotive have lost roughly 39.2% of their value in 2026.
Led by CEO Mark Zuckerberg, Meta executives sold more than \$50 million worth of company stock following the release of Meta's Muse AI Agent.
Frazier Life Sciences Management raised its stake in the cholesterol-focused biopharmaceutical company to 18,938,902 shares. Frazier Life Sciences did so through the purchase of 850,000 NewAmsterdam Pharma shares from Sept. 8 through Sept. 18 at per share prices ranging from \$21.08 to \$25.50. Following the latest purchases, Frazier owns a 15.8% stake in NewAmsterdam Pharma's outstanding stock. Shares of NewAmsterdam Pharma have lost roughly 29.5% of their value in 2026.
Gamco Investors raised its stake in the floor cleaning equipment maker to 1,022,610 shares. Gamco Investors did so through the purchase of 97,920 Tennant shares from July 29 through Sept. 21 at per share prices ranging from \$66.22 to \$84.93, and slightly offset those purchases through the sale of 850 shares from July 24 through Aug. 27 at \$70.45 to \$87.30. Following the latest purchases, Gamco Investors owns a 6% stake in Tennant's outstanding stock. Shares of Tennant have lost about 9.2% of their value in 2026.
Spruce House Investment Management raised its stake in the real estate services company to 3,282,012 shares. Spruce House did so through the purchase of 489,675 Colliers shares from Sept. 23 through Sept. 28 at per share prices ranging from \$89.68 to \$92.16. Following the latest purchases, Spruce House owns a 6.6% stake in Colliers' outstanding stock. Shares of Colliers International have lost about 38.4% of their value in 2026.
ISQ Global Fund II lowered its stake in the midstream energy services company to 17,618,164 shares. ISQ Global did so through the sale of 480,621 Kinetik Holdings shares from Aug. 20 through Sept. 21 at per share prices ranging from \$53.50 to \$56.45. Following the latest sales, ISQ Global continues to own an 18.4% stake in Kinetik Holdings' outstanding stock. Shares of Kinetik Holdings have gained roughly 40.4% in value in 2026.
纳斯达克发行股票(Nasdaq Issues)包括在纳斯达克全球精选市场(Nasdaq Global Select)和纳斯达克全球市场(Nasdaq Global Market)层级交易的股票。它们根据经美国证券交易委员会(SEC)批准的公众持股市场价值、交易量、价格和做市商数量来决定是否符合纳入条件。
Oct. 2: While many are focusing on the headline metrics—nonfarm job growth, average hourly earnings, the unemployment rate—and assessing what they are saying about the labor market or the broader economy or what they might mean for the FOMC, we'll offer two numbers—53.1% and 60,167—that we think speak volumes.
First, the initial collection rate for the September establishment survey was a ridiculously low 53.1%, which right off the bat renders the initial September estimates of nonfarm employment, hours, and earnings highly suspect. Second, and more importantly, at least if you set aside the low September collection rate, over the 12 months ended in September, the not seasonally adjusted data show private sector payrolls increased by an average of 60,167 jobs per month, or right in line with the trend rate that has prevailed since early 2025. This is, to us, the most relevant data point we can pull from the September employment report; while the estimates of monthly job growth on a seasonally adjusted basis have been all over the map, the underlying trend rate of job growth in the not seasonally adjusted data has been notably stable.
Moreover, though well lower than what we were all accustomed to over the years prior to the pandemic, the current trend rate of job growth is more than adequate to hold the unemployment rate in check, given what is, month to month swings notwithstanding, much weaker labor supply growth. This has been, and remains, our focus.
Oct. 1: The four-year presidential cycle has historically been a useful guide for understanding market trends. Since World War
To be considered for this section, material, with the author's name and address, should be sent to MarketWatch@barrons.com.
II, the pre-election year (2027) has been the strongest of the four years, on average. In fact, the S&P 500, including dividends, hasn't experienced a negative pre-election year since the 1930s. Many market historians attribute this strength to policymakers' tendency to support economic growth heading into an election year through fiscal and monetary policies that encourage favorable economic conditions.
This year, the midterm election year, has historically been more volatile. It is often associated with larger-than-average market corrections that tend to reach their lows during the September to October time frame. While these periods can be uncomfortable for investors, history suggests they have often created attractive opportunities. Since 1950, the 12 months following a midterm election have produced an average return of 16.6% for the S&P 500, with no negative 12-month periods following the election.
While market volatility often creates uncertainty during midterm election years, history suggests that some of the best gains may lie ahead. When the four-year presidential cycle is analyzed quarter by quarter, the next three quarters emerge as the strongest period of the cycle. On average, the S&P 500 has gained 20.2% during the nine months from Oct. 1 of the midterm election year through June 30 of the following pre-election year.
Oct. 1: Capital spending booms rarely end well for investors. Investing vast sums quickly tends to produce a major decline in returns on capital. And share prices of companies undertaking massive capital expenditure often peak well before their investment outlays do.
Data centers being commissioned today will likely become outdated (and uncompetitive) within a few years as technology improves and low-marginal-cost competitors emerge. This would push hyperscalers' return on equity far below what their current valuations imply.
Given the steep cost of data-center build-outs and technology, providers of compute today are unlikely to hit their profitability
"Since World War II, the pre-election year (2027) has been the strongest of the four years [of the presidential cycle], on average. The S&P 500, including dividends, hasn't experienced a negative pre-election year since the 1930s." –Bryan, Michael, and Ronald Sadoff, Wealth Enhancement
targets. Demand for compute is contingent on token prices. If token prices plummet, demand for compute would rise substantially, but eat into model providers' revenue. However, if token prices don't drop considerably, demand for compute would be underwhelming....
For the AI trade, the canary in the coal mine will be the companies investing heavily in data centers. If their stock prices drop or corporate spreads widen materially, they will face pressure to cut back projected investment. This will weigh on the share prices of their suppliers (semiconductor producers, industrial companies, etc.).
Expectations for U.S. profit growth and AI spending are unrealistic and will correct sooner than most anticipate.
Sept. 30: Credit spreads are the difference in yields between two bonds with the same (or similar) maturities but different credit qualities—for instance, the difference between the yield on a 10-year Treasury and the yield on a 10-year corporate bond, or an index of corporate bonds with a maturity around 10 years. When credit spreads widen, especially in times of low rates, it means the bond market could be pricing in a greater chance of an economic slowdown. However, in times of elevated yields, credit spreads can tell us if bond markets are getting concerned about corporate profits.
We should become more worried about this bull market if the rise in Treasury yields is accompanied by a widening of credit spreads. Positively, that isn't happening now. We watch the Moody's Baa/10-year Treasury yield credit spread, which compares the yield on 10-year debt between the higher end of the "junk" bond complex to the 10-year Treasury yield. Anything above $2.0\%$ is a warning shot, and above that is a potential problem. However, since Aug. 14, around when the 10-year yield really began to accelerate, credit spreads have declined sharply. and recently hit a one-year low of $1.39\%$ . That tells us the rise in Treasury yields isn't being accompanied by increased concern for economic growth or corporate health, and that's a good thing. —Tom Essaye
The panic/euphoria model is a gauge of investor sentiment. It identifies "Panic" and "Euphoria" levels which are statistically driven buy and sell signals for the broader market. Historically, a reading below panic supports a better than 95% likelihood that stock prices will be higher one year later, while euphoria levels generate a better than 80% probability of stock prices being lower one year later.
Source: Citigroup Investment Research - US Equity Strategy
DATA
Statistics from Sept 28 - Oct 2, 2026 | Barron's 50-Stock Average | 51 | Cash Track | 47 | Coming Earnings | 51 | Conference Call Calendar | 51 | Consensus Estimate | 51 | Delta Tactical Sentiment | 51 | Distributions & Offerings | 53 | Dividend Boosts - Reductions | 52 | Dividend Ex-Payment Dates | 52 | DJ Averages | 49 | DJ U.S. Total Market Industry Groups | 51 | Dow Jones Averages | 49 | Dow Jones Per Share Values | 50 | Exchange Traded Portfolios | 46 | Federal Reserve Data Bank | 52 | Foreign Exchange | 51 | Gold & Silver Prices | 52 | Gold Mining Index | 52 | Indexes P/Es & Yields | 50 | Initial Public Offerings | 50 | Investor Sentiment Readings | 50 | Key Foreign Market Indexes | 45 | Market Lab | 49 | Money Rates, U.S. & Foreign | 51 | Mutual Funds | 47 | N.Y. Stock Exchange | 37 | Nasdaq National Market | 41 | New Corporate Listings | 50 | New Highs & Lows | 53 | NYSE Half-Hourly Volume | 50 | Other Market Indexes | 49 | Pulse of the Economy | 51 | Stock Splits - Special Dividends | 52 | Stock Volume | 50 | Trading Diary | 49 | Vital Signs | 30 | Week In Stocks | 50 | Weekly Bond Statistics | 52 | Winners & Losers Stocks | 35 | Contact Us
For queries, email us at editors@barrons.com
NEW YORK STOCK EXCHANGE COMPOSITE LIST - NEW HIGHS - NEW LOWS |
-52-Week- |
Tick | Div | High | Low | Name | Sym | Yld | P/E | Last | Chg. | Amt. |
Why Is It So Hard: NYSE Composite breadth fell for a seventh week as the S&P 500 dipped 0.3% as gains in tech stocks helped offset weakness elsewhere. Losing stocks outpaced winners by nearly 2 to 1.
In generating this chart, we subtract each day's NYSE composite declines from that day's advances. The resultant total is added to the next day's total, and so on. When all five days' numbers are added together, this produces the weekly figure we plot. Dec. 31, 1985 =1000. |
Chip Power: The Nasdaq Composite Index closed Friday at 27,191, up 0.5% for the week and just shy of its 27,244 record on Sept. 22. Nvidia neared it record close. Micron reported a stunning gross margin of 87%.
BlackRock Funds A: | AdvLgCapCore | 25.39 | -0.08 | 18.2 | 99.0 | CapAppr | 32.65 | 0.28 | 16.6 | 98.4 | EqtyDivd | 21.89 | -0.30 | 13.6 | 67.7 | GlblAlloc | 20.44 | -0.05 | 7.6 | 54.6 | HlthScOp | 63.24 | -1.77 | 8.1 | 38.2 | MultiAstIncome | 10.36 | -0.08 | 2.6 | 33.3 | NatIMuni | 9.46 | 0.03 | -2.8 | 7.8 | ScTechOppA | 88.55 | 2.00 | 41.2 | 163.9 | The listings include the top 1250 open-end funds by assets. These funds value their portfolios daily and report net asset values (the dollar amount of their holdings divided by the number of shares outstanding) to the National Association of Securities Dealers. Total returns reflect both price changes and dividends; these figures assume that all distributions are reinvested in the fund. Because Lipper is constantly updating its database, these returns may differ from those previously published or calculated by others. 3 year returns are cumulative. The NAV is the last reported closing price for the week. Footnotes: NA: not available. NE: performance excluded by Lipper editor. NN: fund not tracked. NS: fund not in existence for whole period. e: ex capital gains distributions. f: previous day's quote. n: no front- or back-end sales charge. p: fund assets are used to pay marketing and distribution costs (12b-1 fees). r: fund levies redemption fee or back-end load. s: stock dividend or split of 25% or more. t: fund charges 12b-1 fees (for marketing and distribution) and a back-end load. v: capital-gains distribution may be a return of capital. x: ex cash dividend. | NAV | Net Chg. | YTD % Ret. | 3-Yr. % Ret. | NwWrldA | 107.14 | -1.23 | 14.9 | 71.6 | SmCpA | 82.22 | 0.30 | 12.2 | 49.8 | STBFA | 9.36 | 0.00 | -0.1 | 12.2 | TxExA | 11.81 | 0.00 | -3.2 | 10.7 | WshA | 66.22 | -0.67 | 6.5 | 65.9 |
AMG Managers Funds: |
YachtmanFocFd I24.08 | NA | NA | NA | YacktFocFd N n | 24.19 | NA | NA | NA | YacktmanFd I | 26.47 | NA | NA | NA |
Angel Oak Funds Trst: | AglOkMtiStFdClIn | 8.52 | NA | NA | NA |
AQR Funds: | DAFR6 | 13.30 | NA | NA | NA | DivStr I | 15.53 | NA | NA | NA | EqMktNeut R6 | 12.34 | NA | NA | NA | LngShrtEq I | 22.57 | NA | NA | NA | MgdFutStrI | 11.34 | NA | NA | NA | Multi-Asset R6 | 13.28 | NA | NA | NA | StylePremAlt R | 11.14 | NA | NA | NA |
Take the Money: More cash came back to stock funds, narrowing their trailing month's average weekly outflow to \$570 million. Money-market funds saw their outflows surge to \$23.9 billion, on average. Taxable-bond fund cash inflows grew slightly, to average \$5.1 billion a week, while muni-bond funds had widening outflows, averaging \$400 million.
Equity Funds
Municipal Bond Funds
A red chart indicates a lower value than the starting period. Green means it's higher than the starting period. The charts above show four-week moving averages of net cash flow in millions of dollars.
Metropolitan West: | TotRetBd | 8.66 | NA | NA | NA | TotRetBdl | 8.66 | NA | NA | NA | TRBdPlan | 8.12 | NA | NA | NA | UnconstrBdl | 10.10 | NA | NA | NA |
Nicholas Group: | Nich n | 95.84 | 0.22 | 8.3 | 49.5 |
Northern Funds: | Bdldx n | 8.81 | NA | NA | NA | EmMktsEqldx nr | 17.96 | NA | NA | NA | HiYFxInc n | 5.84 | NA | NA | NA | IntlEqldx nr | 19.18 | NA | NA | NA | MidCpldx n | 23.32 | 0.14 | 12.1 | 55.1 | SmCapIdx n | 17.82 | -0.02 | 15.2 | 67.9 | StkIdx n | 76.88 | -0.19 | 13.8 | 87.0 |
Victory Funds: | EstVall | 48.78 | NA | NA | NA | SmCoOppl | 51.14 | NA | NA | NA |
Victory Port: | RS Global Fd Y | 31.66 | NA | NA | NA | Market Neutral I | 9.28 | NA | NA | NA | SSfnd | 51.04 | NA | NA | NA | VsycamoreFnd | 48.81 | NA | NA | NA |
Victory Portfolios I: | 500Indx Reward n | 93.01 | NA | NA | NA | CrnstModAggr n | 29.68 | NA | NA | NA | Gr&Inc n | 28.45 | NA | NA | NA | Grwth n | 42.71 | NA | NA | NA | Inco n | 11.14 | NA | NA | NA | IncStk n | 21.05 | NA | NA | NA | Intl n | 34.03 | NA | NA | NA | IntmTerm n | 11.87 | NA | NA | NA | Nasdaq100 n | 73.18 | NA | NA | NA | S&PIdx n | 92.93 | NA | NA | NA | SciTech n | 41.69 | NA | NA | NA | TarRet2040 n | 15.84 | NA | NA | NA | VicAggFnd n | 82.18 | NA | NA | NA | SustWld n | 35.65 | NA | NA | NA | CorePlus INSTL | 8.77 | NA | NA | NA | Income Fund INST | 11.14 | NA | NA | NA | Short-Term INSTL | 8.98 | NA | NA | NA |
Note: Theoretical highs and lows are shown. A red chart indicates a lower price than the starting period. Green means it's higher than the starting period.
NorthStar Earth & Space Enterprises (NSTR),原名为 Viking (VACI)
📄 Original Section
U.S. Dollar Index vs Euro and Yen
Green Machine: The rise in long-term Treasury yields to multidecade highs gave a lift to the dollar. Inflation, economic growth, and concern about budget deficits all played a role. Measuring the dollar against six currencies, the ICE U.S. Dollar Index climbed 0.92%.
Yields (%) | When Issued* | Last Auction | $95.0 bil | 3-month | 4.069 | 4.110 | $82.0 bil | 6-month | 4.269 | 4.285 | Tuesday | $58.0 bil | 3-year | 4.906 | 4.474 |
* As of Friday afternoon. | SEC Form 144 must be filed by holders of restricted securities (also called letter stock) who intend to sell shares. Shares Indicated: the number to be sold. Sales Date: the approximate date of the sale. (Sometimes shares aren't sold, even though their owner has filed a Form144.) Source: LSEG Data and Analytics | Company | Sym | Shares Indicated | $ Value | Sale Date | Seller | Title | Kodiak Ai | KDK | 3,250,000 | 9,035,000 | 9/25/26 | Wendel, Andreas | AF | Sinclair | SBGI | 298,808 | 3,845,659 | 9/24/26 | Smith, Frederick | D | Coreweave | CRWV | 200,000 | 17,014,000 | 9/29/26 | Intrator, Michael | H | Roivant Sciences Ltd | ROIV | 200,000 | 7,323,556 | 9/30/26 | Venker, Eric | O | Coca-Cola | KO | 184,117 | 16,167,314 | 9/28/26 | Mann, Jennifer | O | Atlanta Braves | BATRK | 175,395 | 9,460,806 | 9/30/26 | Schiller, Derek | O | Pagerduty | PD | 172,500 | 2,578,875 | 9/30/26 | Tejada, Jennifer | OD | Alto Neuroscience | ANRO | 134,886 | 3,596,061 | 9/29/26 | Smith, Nicholas | O | Cerebras Systems | CBRS | 120,000 | 24,769,200 | 9/25/26 | Lie, Sean | O | Vornado Realty Trust | VNO | 90,000 | 3,074,400 | 9/25/26 | Chera, Haim | O | ---
The Arms index, also known as the short term trading index, is a number derived by dividing one quotient into another quotient. The numerator in the index is the number of advancing stocks divided by the number of declining stocks. As of 3/14/11, the denominator in the index is now the composite volume of advancing stocks divided by the composite volume of declining stocks.
40.6% | Electric power, (mil. kw hrs) (EEI) | Sept 26 | 83,811 | 92,280 | 84,530 | -0.85 | Petroleum, related capacity, % | Sept 25 | 92.5 | 94.0 | 91.4 | 1.20 | Rotary rigs running, U.S. & Can., (Hughes) | Oct 2 | 814 | 807 | 739 | 10.15 | Steel, (thous. tons) | Sept 26 | 1,845 | 1,785 | 1,770 | 4.24 | Steel, rated capacity, % (AISI) | Sept 26 | 80.5 | 77.9 | 78.1 | 3.07 | The Delta MSI measures the position of a representative set of stocks relative to an intermediate-term moving average crossover (MAC) point. When greater than 50% of the stocks are above this MAC point, the market is bullish. When the indicator is below 50%, the market is bearish and risk is elevated. Manager uses discretion on asset allocation when MSI is at 50% +/- 3%. |
Consumption and Distribution | Consumer spending, (bil. $) | Aug | 22,308.5 | r22,117.7 | 21,029.5 | 6.08 | Factory shipments, (bil. $) | Aug | 658.62 | r658.65 | 606.85 | 8.53 | Instinet Research Redbook Avg. (monthly %) | Sept 26 | -0.42 | 0.53 | 0.76 | .... | Baltic Dry Index | Oct 2 | 3,148 | 3,426 | 1,901 | 65.60 | Personal consumption, (bil. $) | 2nd Qtr | 16,788.7 | r16,634.2 | 16,378.3 | 2.51 | Pulse of the Economy |
Special Drawing Rights (SDR) are based on exchange rates for the U.S., British, and Japanese currencies. Source: International Monetary Fund. a-Russian Central Bank rate. b-government rate. d-rebased as of Jan. 1, 2005. y-floating rate.
Readings in the CBOE equity put-call ratio of 60:100 and in the S&P 100 of 125:100 are considered bullish, for instance. Bearish signals flash when the equity put-call level reaches the vicinity of 30:100 and the index ratio hits 75:100.
Coming Earnings | Consensus Estimate | Year ago |
T | Constellation Brands (Q2) | $3.55 | $3.63 |
W | Levi Strauss (Q3) | 0.36 | 0.34 |
TH | Pepsico (Q3) | 2.30 | 2.29 |
F | Delta Air Lines (Q3) | 1.94 | 1.71 | Consensus Estimate
Day | Consensus Est | Last Period | T | August Trade Balance | -$95.0 bil | -$88.6 bil | W | August Consumer Credit | $15.6 bil | $18.1 bil | F | October Michigan Sentiment | 48.0 | 48.1 | Money Rates
Unless otherwise indicated, times are Eastern. a-Advanced; f-Final; p-Preliminary; r-Revised Source: FactSet | Latest Week | Prev. Week | Yr Ago | Discount Rate (NY) | 4.00 | 4.00 | 4.25 | Prime Rate (base) | 7.00 | 7.00 | 7.25 | For more information about coming economic reports - and what they mean - go to Barron's free Economic Calendar at www.barrons.com
Conference Call Calendar | Company | Date | Time | Earnings-Related Period | Delta Air Lines | October 9 | 10:00AM | Q3 |
Weekly Bond Statistics | New Offerings, (mil $) (v) | Last Week | Prev. Week | Yr Ago | Corporate (z) | 11,115 | r42,437 | 12,925 | Municipal (z) | 4,971 | r11,225 | 9,704 |
(Barron's index of 10 high-grade corporate bonds.) | 5.44 | 5.33 | 4.27 |
(Barron's index of 10 medium-grade corporate bonds.) | 6.09 | 5.95 | (High-grade index divided by intermediate-grade index; decline in latter vs. former generally indicates rising confidence, pointing to higher stocks.)
Other Confidence Indicators:
Bloomberg Barclays US Long Treasury\*
Bloomberg Barclays US Credit
(This index includes all publicly issued, fixed-rate, non-convertible, investment-grade, dollar-denominated, SEC-registered corporate debt.) |
(Index of yields of 20 general obligation municipal bonds.) | 5.21 | 5.13 | (Index of 40 actively-traded tax-exempt bonds; component issues are changed regularly to keep the index a current picture of the market. Source: The Bond Buyer
(Difference between yield on highest-grade corporate bonds and yield on stocks on the DJIA.) -3.93 -3.84 -2.69 |
Yield on DJ Equal Weight US Corp Bond Idx: | Corp Bonds, (y) | 6.28 | 6.21 | 4.92 | ---
This table lists the earnings of the Dow Jones Industrial Average component stocks based upon generally accepted accounting principles. Earnings include discontinued and nonrecurring items but exclude extraordinary items and accounting changes as reported by the company and adjusted by the Dow Divisor in effect at quarter-end. The total dividends of the component stocks are based upon the record date and adjusted by the Dow Divisor in effect at quarter end. The payout ratio is the latest 12-months dividends divided by the latest 12-months earnings. r- Revised to correct Microsofts Q4 earnings released on Jan. 24, 2013. | Year Ended |
作者是布鲁金斯学会(Brookings Institution)的非驻院高级研究员,以及《市场修正而非政府干预:改善美国经济之路》(Market Corrections Not Government Interventions: A Path to Improve the U.S. Economy)一书的作者。
中期选举最终将演变成沿着这一路线展开的精心编排的政治戏剧。而两大政党持续未能将经济效率放在首位,将继续成为公众的负担——抑制长期增长,提高消费者成本并浪费资源。然而,美国政治经济学的根本教训是一种出人意料的乐观主义。该系统的天才之处不在于它能产生开明的政策制定者,而在于它培育了一个动态的、去中心化的经济体,使其能够在这些人地干扰下依然繁荣。 B
“一场‘东北风暴’正席卷债券市场,”Yardeni Research 总裁 Ed Yardeni 在近期的一次网络研讨会中表示。对于现有债券持有者来说,这是坏消息。好消息是,未来的总回报前景有所改善。债券的初始收益率是投资者预期总回报的一个粗略指标,而综合指数的收益率接近 5%。这为寻求增加固定收益组合的投资者提供了机会。
最后,考虑资产存放位置——即你将债券持有在何处。如果存放在应税账户中,收益需缴纳年度普通收入税。Tax Alpha 公司创始人 Matthew Chancey 表示:“对于高税率档位的退休人员来说,应税账户中不应存放债券(免税市政债券可能是例外)。”使用传统的个人退休账户 (IRA),你仅需就为满足年度需求而提取的特定金额纳税。这使得你的应税收入能够继续符合某些福利的领取条件,而不会触发更高的边际税率或联邦医疗保险附加费。 B
The table below lists the total earnings (losses) of the Dow Jones Industrial Average component stocks of record based on generally accepted accounting principles as reported by the company and adjusted by the Dow Divisor in effect at quarter end and the total dividends of the component stocks based on the record date and adjusted by the Dow Divisor in effect at quarter end. N.A.-Not available. r-Revised. | Year |
Quarter Ended | Close Price | Qtrly Earns | 12-Mo. Earns | P/E Ratio | Qtrly Divs. |
2026 | Sept. | 30 | 50906.05 | NA | NA | NA | 194.69 | June | 30 | 52319.20 | 830.32 | 2405.65 | 21.75 | 201.27 | Mar. | 31 | 46341.51 | 546.89 | 2066.71 | 22.42 | 199.32 |
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The weakening among stocks outside a golden circle of market leaders isn't the bad omen you might think. Indeed, this could be the setup for a year-end rally.
10 Stocks to Buy for Quantum Computing's Next Phase MACKENZIE TATANANNI
12 Veeva's AI Tools for Life Sciences Could Boost Its Stock 30% DAN VICTOR
14 How Investors Got Burned by the Broadstreet Private-Equity Fund BILL ALPERT
16 A Sneak Peek Into the Future of AI-Assisted Trading ANDREW WELSCH
26 Q&A: Top Consumer Stocks From Fidelity's Ben Shuleva EVIE LIU
54 Other Voices: What's to Blame for Capitalism's Unpopularity CLIFFORD WINSTON
LEWIS BRAHAM
Funds Quarterly: Have It All With a ‘Core and Explore’ Approach
Rounding out your indexed investments with well-managed focused funds can help protect your portfolio from steep losses and goose your gains. Plus: the quarter’s winners and losers.
COLUMNS
7 ANDY SERWER – UP & DOWN WALL STREET
8 JACK HOUGH – STREETWISE
13 ANDREW BARY – INCOME INVESTING
25 RANDALL W. FORSYTH – THE ECONOMY
28 ADAM LEVINE – TECH TRADER
29 PAUL R. LA MONICA – THE TRADER
32 CRAIG MELLOW – INTERNATIONAL
33 STEVEN M. SEARS – STRIKING PRICE
55 ELIZABETH O'BRIEN – RETIREMENT
DEPARTMENTS
6 INDEX OF COMPANIES
9 REVIEW & PREVIEW
34 INSIDE SCOOP, 13DS
35 WINNERS & LOSERS
36 MARKET VIEW
55 MAILBAG
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UP & DOWN WALL STREET
The New Math of AI: Are Those Trillion-Dollar Numbers Real?
The New Math of AI: Are Those Trillion-Dollar Numbers Real?
W
Anthropic's IPO is “completely ludicrous” and “the triumph of Wall Street fees over critical thinking,” says Roger McNamee.
e have offi-
cially en-
tered the era
of trillion-
dollar math
that doesn't
add up.
On Wednesday, the U.S. military pulled up its tents and left Iraq after more than 23 years, 4,418 U.S. deaths, and \$1.7 trillion in spending.
This past week we also learned from Anthropic's long-anticipated initial-public-offering prospectus that the artificial-intelligence colossus is eyeing a \$2 trillion valuation. Add to that a new Brookings paper, which says the AI infrastructure buildout will total \$10.3 trillion from 2025 to 2032.
All mind-blowing numbers. But is any of this worth it? (Especially the thousands lost in Iraq, which puts the rest in perspective.) It would be hard to deny that AI mania has us, Icarus-like, flying too close to the sun.
Nvidia, the poster child of AI exuberance, is up 1,249% since ChatGPT was launched on Nov. 30, 2022—even as AI models have gone rogue countless times. And still, Wall Street is shoveling money into these enterprises. All of which should give us pause.
But it hasn't, evident in light of the recent man-bites-doggery in which President Donald Trump pooh-poohs AI naysayers while AI CEOs practically beg for federal oversight. Mostly what came out of Big Tech's big sit-down at the White House this past week, besides a “morally binding” agreement and the president saying AI is “going to be very, very safe,” was a photo op reminiscent of a Soviet-era
BY ANDY
SERWER
parade reviewing stand, replete with a POTUS-posted seating chart.
A majority of Americans think we need more. In a new poll, over half of those surveyed by The Wall Street Journal want safeguards on AI, and nearly two-thirds want a pause in the development of the technology.
"I'm particularly concerned about [AI companies] pushing the idea that they can regulate themselves," says Geoffrey Hinton, a Nobel laureate in physics who worked at Google parent Alphabet for a decade and has been called the godfather of AI. "Nobody thinks drug companies should be allowed to regulate themselves. The FDA forces them to prove their drugs are safe before their release. At the very least, we should have something like that for AI."
Though a number of dissenters from
AI companies have resigned in protest recently, some from Silicon Valley were wary of tech running amok years earlier, such as Frances Haugen of Facebook parent Meta Platforms, and Tristan Harris, Timnit Gebru, and Hinton of Alphabet.
One of the first and loudest of the technorati to turn techwary was Roger McNamee, co-founder of Silver Lake
and Elevation Partners, who worked closely with venture firm Kleiner Perkins and Meta CEO Mark Zuckerberg. McNamee began biting the hand that fed him a decade ago, warning about social media most pointedly in his book Zucked: Waking Up to the Facebook Catastrophe, published in 2019. True, Meta's stock has risen over $300\%$ since then, but McNamee was calling out societal harm, which he argues hasn't diminished. (McNamee is an executive producer of a new movie about Facebook, The Social Reckoning, in which Bill Burr plays a character loosely based on him.)
McNamee has turned his attention to the business of AI, which he seems to think is a kind of delirium “balanced on the head of a pin”: “The pin is this notion that people are going to deploy AI widely, they’re going to pay a ton of money for it, and that companies are going to get the cost structure down so it generates enough cash flow to service their debt,” he says. “That’s a lot of dependencies."
Anthropic's IPO is “completely ludicrous” and “the triumph of Wall Street fees over critical thinking,” he says. “Remember, there are 10 other companies selling this stuff. A \$1 trillion or \$2 trillion valuation for a company with this revenue is ridiculous.” (Anthropic’s revenue grew 12-fold in 2025 to nearly \$4.6 billion.)
Ah yes, Anthropic's math. Reuters reports that the company a) lost \$42 billion last year, b) expects to spend \$518 billion on cloud computing and infrastructure obligations in coming years, and c) warns that its business could cause “catastrophic or existential risks to humanity.”
Sheesh. Remember when we thought tobacco companies were the bad guys? More to the point, who in their right mind would dip their beak here? Sure, early investors like former Google CEO Eric Schmidt might like you to buy their pre-IPO Anthropic shares—he bought in May 2021 at a \$461 million valuation, according to PitchBook, which, at a \$2 trillion valuation, would give him a dizzying 4,338-fold gain—but why oblige him? As Barron's recently noted, "Anthropic's IPO looks like a risky bet, at best."
What about the AI bubble writ large? “Ordinarily, you’d have expected the government to intercede. Now you’re counting on the bond market,” says McNamee, referring to the deteriorating credit ratings and bond prices of some AI players such as Oracle, Akamai Technologies, and CoreWeave.
Elevation Partners co-founder Roger McNamee in 2021: He was one of the first and loudest of the technorati to turn tech-wary.
“AI itself is not going to go bust,” says Hinton. “It works, just like railways worked. But everybody thought you could get rich quick by investing in railways, and there was a bust. That often happens with new technologies. Will we see a bust? I don’t think it’s impossible. It is a large fraction of the U.S. stock market now. People are piling in.”
To paraphrase Sen. Everett Dirksen's reputed observation: "A trillion here, a trillion there, and pretty soon you're talking real money."
The money here is real. The math, not so much. B
STREETWISE
Barclays Capital estimates that the prize in today's persistent agent turf war could be \$10 trillion in stock market value, or nearly two Nvidias.
Just in time for Halloween, Wall Street has a new hobgoblin. It's called the persistent agent, and on the scariness scale, it falls somewhere between a wet gremlin and a bond vigilante.
By now you have surely heard of Muse, launched on Sept. 8 by Meta Platforms, the company behind Facebook, Instagram, and creepy bionic eyeglasses. Another early contender is privately held Instinct, whose agent is invitation-only for now. This past Tuesday, ChatGPT owner OpenAI launched an agent called Dots. Anthropic has Claude Cowork, and Alphabet has Gemini Spark. Elon Musk's SpaceX has Grok Bot. Apple has, well, not much but maybe enough—we'll come to that.
Musephobia has helped send shares of Planet Fitness and Sirius XM Holdings down 19% and 13%, respectively, since Sept. 7, on fears that agents will make it easy for busy and distracted consumers to cancel forgotten subscriptions. Airbnb and Booking Holdings are down 13% and 17%, respectively, because Muse can chisel down travel costs through tireless robo-shopping. And Charles Schwab is off 11% because the agent might coax customer balances out of checking accounts paying 0.01%.
So far, there have been more stock tricks than treats, but Meta itself is up $18\%$ since Muse's launch. This past week, a Morgan Stanley travel analyst theorized that winners in Muse-assisted travel will be companies with differentiated goods, relatively
BY JACK
HOUGH
limited shopper attention, and high distribution costs. Cruise lines check all three boxes, and, coincidentally or not, Royal Caribbean Group and Carnival are lately running slightly ahead of the market.
Two new reports are more jarring. One from BofA Securities explores whether Muse is a threat to Apple. Unlikely, it concludes, but the question is more telling than the answer. Why would a month-old app pose problems for a hardware company with 2.5 billion installed devices worldwide? Barclays Capital, meanwhile, wins on financial audacity. It estimates that the prize in today's persistent agent turf war could be \$10 trillion in stock market value. That's nearly two Nvidias.
When the stakes are that high, the fear is rampant, and the technical details are complicated enough to make a cyborg cry in binary, it's time for another installment of my semiregular How to Pretend to Understand series. Past topics have included Brexit and quantum computing. The idea is to quickly arm the layperson with just
enough background on a topic to survive an office conversation about it, lord a couple of facts over less-informed friends, and maybe form some educated investing guesses.
Personable as your favorite chatbot might seem, it doesn't really chat. It converts questions into numbers representing words or word fragments (tokens), then uses a probability engine to determine the next best number to add, again and again, until it finishes its “response” and converts its added numbers back into words. A persistent agent, on the other hand, doesn't simply ask itself which token comes next in the answer, but rather which tool it should use or sub-task it should perform to get closer to an assigned goal.
The “persistent” part means that these agents can keep working even after you’ve logged off and learn about you as they go, like a human assistant. For that, they need their own computing sandbox. Pioneer OpenClaw, launched late last year, can run locally on user machines. Muse uses a virtual machine, or pretend computer made from software running on an actual computer, like a tiny apartment inside a massive building. Agents also use “headless” tools, meaning they can browse websites, fill out forms, place orders, send messages, and even make synthesized voice calls entirely in code, without any of the windows or graphical front ends that humans need to make sense of the internet.
Two other important concepts to consider are connectors and payment rails. Connectors are things like email, calendars, account logins, and other sources of personal information. The more you tell an agent about yourself, the more it can do to (hopefully) help. A Barron's colleague used Muse to find cheap pants and book a toenail-related doctor's appointment, but only by providing his credit-card statement did he find and kill a forgotten subscription. Payment rails allow agents to execute transactions. Muse uses a third-party payment company called Stripe, for customers who've made peace with Mark Zuckerberg snooping through their social media but aren't ready to hand him their credit cards.
Trust is a big deal here. Apple has plenty of it, because it makes money by charging dearly for its wares, not sell-
ing customer information. It has its own payment rail, Apple Pay, but Siri isn't a persistent agent, or even much of a chatbot. Apple's artificial-intelligence trump card was supposed to be that tasks would increasingly run on local or "edge" devices like iPhones, but it's unclear how equipped today's phones are for staying up all night to perform a persistent agent's duties.
Meta has less trust. But it has an early-mover advantage, and an excellent handle on how and where to get paid on services that don't have customer fees. That's important, too: Barclays reckons the cost to host a persistent agent user is around \$4 a month, or 10 times the cost of a chatbot user. Amazon.com has banned Muse as a shopper on the belief that if anyone should get paid to steer customers, it should be the store.
Expect today's agent hopefuls to compete on cost, point of access, third-party application tie-ins, consumer versus commercial use, data sovereignty, and permission—Muse likes to ask before doing things, while Instinct prefers a freer hand.
In a weekly podcast by Barron's, columnist Jack Hough looks at the companies, people, and trends you should be watching. This is Wall Street like you've never heard before. Subscribe to Barron's Streetwise on Spotify, Apple Podcasts, or your favorite listening app.
Barclays says the first agents to lure customers to share connectors hold the advantage, and that Muse and OpenAI Dots are well positioned. BofA says that Apple can eventually win on trust, but that it will be difficult to do so while releasing major software updates only annually, because persistent agents grow more powerful every day. B
It has struggled to release hits that drive viewer engagement and, thus, the stock has suffered: As of Thursday, shares were down 25% for the year, and the stock has declined 37% since closing at a recent high of \$107.79 on April 16.
In Wall Street speak: yuck.
Deutsche Bank analyst Bryan Kraft contends the share price decline is an opportunity. “We believe the current (still very healthy) growth outlook is being undervalued,” he said in a client note.
His firm upgraded Netflix stock to Buy from Hold. Kraft believes that Wall Street's obsession with U.S. engagement overlooks the company's larger total market. Why? International engagement time has increased. This year's first half: U.S. minutes viewed were down 8.6%. The rest of the world: up 5.4%.
“We believe this advantage will allow Netflix to sustain its global leadership position,” Kraft said. “While U.S. viewing trends warrant monitoring...it is important to point out that all programmers experience cyclicality.”
This view isn't universal. HSBC has downgraded Netflix and noted that Alphabet's YouTube is taking viewer share from the streamer.
Yet Deutsche Bank believes the concern is overblown. And while some firms disagree, the majority are keen on Netflix. Per FactSet: 28 Buy ratings and 17 Hold ratings. So, chill. –Kit Norton
September Stocks: The month is typically shaky. How did it compare to Septembers past? The Dow industrials averaged a 1.1% September decline from 1896 through 2025; this year, it took a 4.29% hit. For the S&P 500, it was a 1.1% average decline since 1928 versus -0.45% this year. The Nasdaq? Going back to 1971, it averaged a 0.8% decline. This September: up 1.86%.
AI Angst: OpenAI delayed the release of its GPT-6.1 Astra model. AI agents misbehaved by accessing government websites. Back in D.C., President Trump urged the AI bosses to tone down the gloom. Nobel laureate Paul Krugman joked: "Our technology...can destroy the world, so you'd better invest in our IPO."
No October Surprise? If you were placing bets on Polymarket that the Federal Reserve would raise rates this month, bad news for you. Three Fed officials indicated there was no rush for a pre-Election Day hike. A soft jobs report also assured Wall Street that the Fed will hold off.
Heat Treatment: Speaking of inflation, Northeasterners are facing a particularly chilling forecast: The National Energy Assistance Directors Association says winter's average heating oil bill will be 50% higher.
Oldies Act: What do you do when you have everything? You sue! Former Commerce Secretary Wilbur Ross, 88, and former casino king Steve Wynn, 84, challenged New York's annual pied-à-terre tax in a state court filing.
The Institute for Supply Management releases its Services Purchasing Managers' Index for September. Consensus estimate is for a 55 reading, slightly lower than in August.
The Federal Open Market Committee releases the minutes from its mid-September monetary-policy meeting. At that meeting, the FOMC unanimously voted to raise the federal-funds rate by a quarter of a percentage point, to 3.75% to 4%. With the release of this past week's better-than-expected inflation report and weaker-than-expected jobs report, traders are pricing in a 20% chance that the central bank will raise interest rates at its late-October meeting, down from a 65% chance last week.
The University of Michigan releases its Consumer Sentiment index for October. Economists forecast a 47.7 reading, roughly half a point less than the September data. Consumer sentiment remains in the doldrums.
Quantum computing is becoming a commercial market. Just look at the wave of public listings this year, especially Quantinuum's landmark IPO.
BY MACKENZIE TATANANNI
As artificial intelligence dominates the headlines, quantum computing is gaining steam. Nowhere is that clearer than in public markets, where Quantinuum's landmark initial public offering and a wave of listings this year signal a shift: Quantum is moving from speculative sci-fi to an early commercial market. Late last month, Microsoft un-
veiled a new research center in Maryland, bringing its technology closer to independent evaluators from the government's Defense Advanced Projects Research Agency. IonQ announced that its latest system would be deployed at Nvidia's quantum research center, bridging classical hardware with quantum processors. And a technical paper claimed that IBM's Nighthawk processor took 19 seconds to complete a task estimated to take a supercomputer 110 years.
"A lot of the industry is still doing ‘toy problems,’ ” says Scott Crowder, IBM’s vice president of quantum adoption. “But the people on the leading edge are no longer doing that.”
Nowhere is that leading edge more apparent than in drug discovery, where quantum systems mirror the complex behavior of electrons and molecules. Amgen, one of the world's largest pharmaceutical companies, has embraced the technology to shorten the drug development timeline. A lead investor in Quantinuum's first major funding round, Amgen also collaborates with players like QuEra.
“I look at quantum the same way I look at other emerging technologies,” says Alan Russell, Amgen’s vice president of research and head of R&D technology. “What does it allow us to do that we couldn’t do before, and where can it meaningfully complement the tools we already have?”
For Amgen, that means tackling high-complexity computational challenges, from making sense of vast, intricate data sets to modeling interactions at the molecular level. Amgen,
like others, is looking for “quantum advantage,” or the point where quantum systems can complete a useful task more efficiently than the best available classical supercomputers. In theory, quantum advantage doesn’t require fully fault-tolerant systems, which detect and correct errors in real time. This milestone remains elusive, as scaling quantum systems makes them increasingly vulnerable to environmental noise.
Today's investments are about exploring capabilities and finding practical applications rather than unlocking immediate efficiencies. "For me, the opportunity isn't necessarily about streamlining operations, but understanding whether it can help us tackle scientific problems that are difficult to solve with today's tools," Russell says.
Enthusiasm is spreading across the healthcare landscape. Five years ago, Cleveland Clinic's quantum program started out of a cafeteria at its main Ohio campus. Launched during the organization's centennial to lay a foundation for the next century of care, the initiative centers on the Discovery
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Accelerator—a partnership with IBM spanning over 60 projects in AI, high-performance computing, and, of course, quantum.
“We had that long-term view, which is what every organization looking at quantum needs to have,” says Dr. Lara Jehi, Cleveland Clinic’s chief research information officer. “Otherwise it will never make sense as an investment.”
Researchers from Cleveland Clinic, IBM, and Japanese research institute Riken were nominated for the prestigious ACM Gordon Bell prize for their work in protein modeling. “The innovation was figuring out how quantum and classical can work together,” Jehi says. “It normalizes it, which in and of itself is a big validation.”
While an early attempt to predict postsurgery cardiac risks proved too complex for current hardware, Jehi sees immense potential in areas such as clinical trial logistics, supply chains, and staff scheduling across sprawling hospital networks.
"When we present quantum purely for drug discovery, we're limiting it to an application that only interests
IBM's quantum cabling and connectors
pharma,” Jehi says. “In reality, it could be applied in any research context across areas we haven’t done a good job of exploring.”
Enthusiasm extends to the federal level, where the Commerce Department unveiled a \$2 billion package in May to accelerate quantum technology. Alongside continuing efforts to secure domestic supply chains, Washington is targeting a 2028 deadline to deploy a “scientifically relevant quantum computer” at a national laboratory.
The push partly stems from security concerns. At the center of the debate is Shor's algorithm, a program capable of factoring large numbers at speeds no classical computer can match. The algorithm has never been used to break real-world encryption, but government partners emphasize that preparation can't wait, even with the timing and nature of the risk still unclear.
Bad actors will inevitably harness quantum power, particularly as cloud access lowers the barrier to entry. Industry giants like Amazon Web Services and Microsoft have created ecosystems that host third-party hardware, allowing developers to experiment with quantum algorithms.
"The quantum threat to our public infrastructure is very severe, very real, and certainly coming," JD Dulny, Booz Allen's quantum lead, tells Barron's. "We don't know what the world's going to look like in the next two to three years. Whenever a change shows up, as you've seen with AI, people are going to do amazing things and they're going to do awful things."
For investors looking to bet on quantum's future, pure-play market leader IonQ continues to draw strong interest, with BofA Securities recently initiating coverage of the stock with a Buy rating, citing strategic technical acquisitions such as its recent purchase of chip maker SkyWater Technology.
Government backing highlights other contenders. Infleqtion leads in defense applications like sensors and atomic clocks, while federal stakes in publicly traded players Rigetti Computing, D-Wave Quantum, and Quantinuum validate their respective hardware approaches. IBM remains a central player, though analysts debate how much quantum growth is already priced into the stock. B
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AI Will Transform Medicine. This Stock Stands to Gain.
AI Will Transform Medicine. This Stock Stands to Gain.
Veeva Systems controls more than 80% of market share in biopharma customer-relationship management software. Its stock can rally 30%.
BY DAN VICTOR
A
rtificial intelligence is re-writing the rules of medicine, promising to accelerate drug development, optimize clinical trials, and bring lifesaving therapies to market faster.
Veeva Systems is making that transformation happen. The Pleasanton, Calif.-based company develops software for biotechnology and pharmaceutical customers to manage everything from research and development and regulatory submissions to day-to-day commercial operations. Its software was originally built atop Salesforce, but has since expanded to stand-alone applications.
"There is a huge opportunity for industry-specific AI to help life sciences get the right medicines to more patients," Paul Shawah, executive vice president of strategy at Veeva, says in a statement to Barron's.
As AI plays a bigger role in this workflow, Veeva stock looks like a solid bet into 2027. We see shares with a clear path to reclaim and surpass their record high of \$344 set in 2021. Veeva shares, currently trading around \$273, offer more than 30% upside over the next 12 months.
There are several reasons to like the stock. Veeva controls more than 80% of market share in biopharma customer-relationship management, or CRM, software. The company has been profitable for more than a decade, expanding sales tenfold since 2015.
Mawer Investment Management, a Canadian fund manager, began buying shares earlier this year. Analyst Renaud Paquin's bullish case is centered around Veeva's dominant competitive positioning. Healthcare's compliance technicalities, in particular, make it difficult for competitors to create alternatives.
“All the proprietary data ultimately makes Veeva an AI winner,” Paquin says.
That advantage on the front line of evolving workflows is exactly what Veeva aims to monetize next. A major strategic shift for Veeva since 2024 has been its push to migrate its core customer base off Salesforce onto its native Veeva Vault CRM. The multi-year process aimed at breaking free from that dependency is well under way. It allows Veeva to both capture higher margins and gain full control of the underlying architecture and user experience.
The migration has proceeded more smoothly than envisioned, with 14 of the 20 largest global biopharmas already committed to Vault CRM. In the process, Veeva has become the entry point for AI in the industry, with virtual-assistant-type features that boost productivity.
The vision with agentic AI is to go a step further, handling increasingly complex, multistep workflows with far less human involvement. The company's new Falcon platform targets processes that are otherwise time-consuming and employee-intensive.
The goal, Shawah says, is straightforward: “increasing speed and lowering costs.” One early example is medical, legal, and regulatory, or MLR, review of promotional materials. Falcon MLR is available now, with additional agents for clinical, regulatory, and safety work planned for later this year and into 2027. Veeva estimates its tools could eliminate up to 70% of certain manual administrative tasks and potentially accelerate drug timelines by 30% to 90%.
Global spending on task-specific agents is projected to more than double each year through 2029, at a 119% compound annual rate, to more than \$750
Veeva Systems
Cloud-based software for life sciences
Note: E=estimate; Estimates are for the fiscal year ending Jan. 2028.
Sources: Bloomberg, FactSet
Recent Price
\$285.45
52-Week Change
-4.2%
Market Value
\$46.2 B
2028E P/E
27.8
billion, according to Gartner. In many ways, biopharma is a natural fit for the technology, allowing companies to remove operational headaches and focus on what really matters—therapeutic breakthroughs.
In its fiscal second quarter, Veeva delivered revenue of \$928 million, up 18% year over year, and adjusted earnings per share of \$2.35, also up 18%. Strength in the core Vault CRM offering helped the company raise full-year revenue guidance to nearly \$3.7 billion and adjusted EPS to about \$9.21, the third upward revision this year, representing a 14% increase from last year.
Management continues to target a \$6 billion annual revenue run rate by 2030, implying average annual growth of 17.5% over the next three years.
Wells Fargo analyst Stan Berenshteyn is on board. Acknowledging that full monetization of agentic labor will unfold through next year, the adoption potential is high and could gain traction quickly. He rates shares as Overweight, equivalent to Buy, with a price target of \$330.
Veeva Systems aims to help AI with medical applications.
The stock currently trades around 27 times forward earnings—more expensive than the broader market and even Salesforce at 14 times, yet a discount to the company's historical average earnings multiple of 35 times earnings over the past five years. Veeva stock justifies a premium given the company's regulatory moat and high-quality fundamentals, including a balance sheet with zero debt.
It's a compelling story, but risks remain. The continuing transition off Salesforce onto Vault CRM introduces short-term execution variables that could impact near-term growth. Additionally, sentiment toward biotech, and AI in general, can shift quickly, adding volatility to Veeva's share price.
Notably, adding up Veeva's operating margin—which consistently runs above 45%—alongside top-line growth around 15%, the company scores well above the “Rule of 40,” a long-held value-creation benchmark in software. At a time when AI disrupters are struggling to generate consistent free cash flow, Veeva stands out with an underappreciated AI potential.
For now, Veeva offers investors a rare blend of defensive market dominance and aggressive growth upside. At the intersection of healthcare and technology, Veeva is a winner. B
INCOME INVESTING
TIPS could be the most appealing group of Treasuries since they protect investors from what they fear most–higher inflation.
Long-Term Treasury Bonds Could Be a Good Contrarian Bet
Long-Term Treasury Bonds Could Be a Good Contrarian Bet
A n intriguing contrar-
ian play is long-term
bonds maturing in 20
to 30 years.
There are few fans of the sector, and the negatives are many.
They include intractable federal budget deficits, inflation around 3%, and heavy corporate borrowing for data centers to fuel the artificial-intelligence boom.
Losses have accelerated recently, as the yield on the 30-year Treasury has risen almost a half percentage point to 5.6% in the past month.
Bond maven Dan Fuss, 93, who formerly headed the Loomis Sayles Income fund, told Barron's recently it would “take a team of oxen to make me buy a 20-year bond.” BlackRock urged investors to underweight long-term Treasuries, citing “persistent inflation and high debt loads.”
Fuss argues investors should buy intermediate-term debt—he favors five-to-seven-year maturities—because it offers nearly as much yield as long-term bonds with less risk. BlackRock favors agency mortgage securities that now yield over 6%.
But there are good reasons to consider long bonds.
BY ANDREW
BARY
Yields now are at 20-year highs, with 20-year and 30-year Treasuries yielding about 5.6%. That yield could prove competitive with stocks over the long term and is safe, although there is the risk inflation will erode returns.
“This is one of the best entry points for long-term bonds we’ve seen in nearly two decades. Starting yields are one of the best predictors of forward returns in fixed income,” says Gene Goldman, chief investment office at Cetera Financial Group.
Long-term bonds could offer competitive returns if equity market returns cool. There is no law that says stocks should return 10%-plus annually, as they have done for the past 10 and 30 years. Historically, there are decadelong periods of poor equity returns. That's especially true with the U.S. stock market valued at over \$70 trillion. Long Treasuries also could offer a hedge against stocks if the economy weakens—effectively a put option on the S&P 500 index yield.
There is risk. Bond prices move inversely with yields, and long-term debt gets hit hardest when market rates increase. The \$47 billion iShares Treasury 20+ Year Treasury Bond exchange-trade fund is down more
than 10% this quarter.
Investors can directly buy individual Treasury bonds and TIPS from the Treasury at regular auctions at Treasury.gov and through brokerage firms and banks. They need to buy Treasury zero-coupon and corporate bonds through banks and brokerage firms like Fidelity and Morgan Stanley.
A good alternative to individual bonds are low-cost exchange traded funds. Here are four ETFs worth considering. The iShares 20+ Year Treasury Bond ETF has an average maturity of 26 years, with a current yield of 5.4% The Pimco 15+ Year U.S. TIPS Index ETF has a maturity of 22 years.
Barron's recently highlighted the appeal of 30-year munis yielding over $5\%$ . There also is a case for long-term Treasury bonds, long Treasury zero-coupon debt, long-term Treasury inflation-protected securities, or TIPS, and long-term corporate bonds. These securities are better suited to tax-advantaged accounts like IRAs, while munis belong in taxable accounts.
The Pimco 25+ Year Zero Coupon U.S. Treasury Index ETF has a maturity of close to 28 years and a 5.5% yield, and the Vanguard Long-Term Corporate Bond ETF has a 22-year average maturity and yield of 6.2%.
The Vanguard ETF holds investment-grade debt—mostly triple-B and single-A—and yields 6.2%, almost a percentage higher than the TLT Treasury ETF.
Treasury zero-coupon bonds, or strips, also have their attributes. A buyer receives no cash interest. The interest gets paid at maturity, although investors are free to sell them before that. They are called strips because bond dealers take a Treasury 30-year bond and strip it into the component parts—60 semiannual interest payments and the principal portion of the bond maturing in 30 years—and sell them separately.
A 30-year zero-coupon bond now yields about 5.5% and trades for about 20 cents on the dollar, meaning that an investor will see a fivefold increase in value over 30 years with no risk. Zeros allow investors to lock in a yield—unlike regular Treasuries, where the yield is dependent on investing interest payments at the stated yield.
There is rate risk with 30-year Treasuries, and especially with long-term zeros, but both have a nice feature: Returns are asymmetric in the investor's favor.
Zero-coupon bonds will rise in price more if rates fall than decline if rates increase, due to what bond pros call positive convexity. A 30-year Treasury should increase about 17% in price if rates fall one percentage point and drop 13% in price if rates rise one point based on Bloomberg data, and that drop will be partly offset by interest income. The risk/return on Treasury zeros is even better.
Unlike the underlying bonds in its portfolio, the Pimco 25+ Year Zero Coupon ETF pays interest from the periodic rebalancing of the portfolio. This helps investors pay taxes since they are taxed on the annual accreted interest on Treasury zeros.
TIPS could be the most appealing group of Treasuries since they protect investors from what they fear most—higher inflation. They pay an inflation component tied to the U.S. consumer price index and a bonus, or real, rate above inflation. For 30-year TIPS, the real rate is now 3.3%, which is attractive historically. Essentially, investors are able to get a risk-free 3.3% return above inflation.
The current break-even inflation rate is only 2.3%. This means that if inflation runs above that rate—not a bad bet—investors will do better with TIPS than regular Treasuries. The break-even is calculated by subtracting the real TIPS yield from the Treasury 30-year bond yield.
Given high current rates, it might be smart now to buy that which has been most toxic—long-term bonds. B
---
Playing the Long Game | ETF / Ticker | Recent Price | YTD Total Return | Recent Yield | Fund Assets (billion) | Avg. Bond Maturity (year) | Expense Ratio | iShares 20+ Year Treasury / TLT | $78.62 | -7.0% | 5.4% | $46.6 | 26.0 | 0.15% | Pimco 15+ Year U.S. TIPS Index / LTPZ | 45.36 | -8.2 | 6.9 | 1.0 | 21.6 | 0.20 | Pimco 25+ Year Zero Coupon Treasury / ZROZ | 55.20 | -11.8 | 5.6 | 1.9 | 27.8 | 0.15 | Vanguard Long-Term Corporate Bond / VCLT | 68.97 | -5.6 | 6.2 | 8.4 | 22.0 | 0.03 | Sources: Bloomberg, company reports
Two days after Z Squared began trading on Nasdaq in April, its executives rang the closing bell, joined by trader and television commentator Jon Najarian. A month later,
the crypto mining firm got tapped for the FTSE Russell 2000 index.
That April debut was part of a plan to get unhappy investors out of a private-equity fund called Broadstreet and, in so doing, refute fraud charges that the Securities and Exchange Commission is pressing against Broadstreet's leaders. In Miami's federal court, the SEC accuses Broadstreet's top three executives of raising \$1.2 billion from more than 1,000 investors in a “Ponzi-like” scheme that promised annual returns as high as 28% from things like real estate development, small-business lending, and Dogecoin mining.
While fighting the SEC fraud charges, which they “categorically deny,” the Broadstreet executives redeemed more than 1,300 investors by giving them most of Z Squared’s stock before it started trading. Broadstreet is now trying to redeem its remaining investors with shares in Soulpower Acquisition, a New York Stock Exchange-listed blind-pool special purpose acquisition company run by a self-improvement author.
In July, Broadstreet told the Miami federal court that these shares in the two public companies were worth \$3.6 billion and that investors had suffered no losses.
Yet since their April redemption, the Broadstreet holders have seen their Z Squared shares fall nearly 80%. The two stocks' combined market value is barely \$550 million. Investors tell the SEC that they went into Broadstreet expecting quarterly distributions of cash income. Those payouts halted last year for many investors.
“I did not want speculative stock,” said 64-year-old Broadstreet investor Nikhil Patel, in a federal court declaration filed in August, after Broadstreet sued him and other investors who asked for cash instead of stock.
“I am retired and disabled,” Patel told the court. “[M]y Broadstreet investments represented a substantial portion of my retirement savings.”
Broadstreet says its investors signed releases, agreeing to everything the private-equity firm has done.
"This is a case about ultrarich investors who have now enlisted the government's help to try to have them get their money back in an investment where they self-described themselves as wealthy risk takers," Lorne Berkeley, a lawyer who represents Broadstreet and its executives, told Barron's. "Broadstreet is proud of the two public company exits presented to its investors who overwhelmingly approved the exits."
Two brothers, Joseph and Steven Baldassarra, created the Broadstreet private-equity fund in Greenville, S.C., in 2020.
In 2022, they brought in attorney David J. Feingold as Broadstreet's CEO. In 2011, he and two co-defendants paid \$18.8 million to settle—without admitting—charges by the Federal Trade Commission that the First Universal mortgage modification business deceived indebted homeowners by charging thousands of dollars in upfront fees while doing little to relieve the customers' debts.
Apart from his SEC case, Feingold is fighting the Internal Revenue Service in a Greenville federal court, after it assessed fraud penalties and alleged that he dodged taxes on millions he got from Broadstreet affiliates.
Neither Feingold nor the Baldassarras responded to Barron's' questions beyond their lawyer's statement.
Working out of a Greenville building owned by Feingold, Broadstreet salespeople recruited investors with the help of outside stockbrokers. Most of the investors' declarations in the Miami federal court docket said they had learned of the firm through friends and family.
The firm told investors they were putting their money in any of 14 separate strategies, from home-building to crypto mining.
In a first-quarter 2024 report to investors, Broadstreet boasted that its Dogecoin mining operation was on track to double that year. “The Manager has targeted a 28% annual return,” it told investors.
The SEC started investigating Broadstreet in 2022, and in January 2025 the agency filed a sealed complaint alleging that the Broadstreet bosses used new investors' money to pay inflated returns to those in strategies that were actually unprofitable. Two days after the SEC filed suit, a federal judge ordered Broadstreet to stop soliciting new money.
Feingold denied the charges and asked the federal judge to let Broadstreet keep raising money. He told the court in February 2025 that he ran the 14 businesses, while the Baldassarras ran the funds. Broadstreet's real estate ventures provided thousands of jobs in the Carolinas, said Feingold, and it ran 16,000 Dogecoin mining computers in five data centers and had five more centers coming on-line.
"We have nearly \$225 million worth of machines that consume 100 Megawatts of power or enough energy to power nearly 120,000 homes," Feingold told the court. "It is a massive business."
Dallas-based Kinjalkumar Patel, who invested in the crypto mining offering in May 2023, later told the court that Broadstreet cash payments on his investment came to a halt in March 2025. He said he and his wife had put all of their savings into Broadstreet.
That's when Feingold and the Baldassarras began telling investors that Broadstreet would let them exit their investments for cash, or for shares in a couple of public companies.
Investors in the Dogecoin business learned the next month that they
Source: FactSet
would get shares in a money-losing biotech company called Coeptis Therapeutics Holdings as a swap for 9,800 of Broadstreet's crypto mining computers.
SEC filings by Coeptis in June 2025 said that accounting firm Cohn-Reznick's partners Anthony Doughty and Jake Wright appraised the mining systems in March 2025 at a value of \$660 million, or \$67,378 per unit. The filings said the valuation had assumed the machines were all Antminer L9 systems when, in fact, 84% of the fleet were L7s—an older, less-powerful system.
The \$660 million CohnReznick valuation led to Broadstreet investors getting 85% of the merged company's shares when the deal went effective in April 2026. A pro forma balance sheet in the merger proxy filing showed that the Broadstreet business had carried the mining systems at only \$35.3 million.
The CohnReznick partners didn't respond to Barron's queries about their valuation.
Nearly 700 Broadstreet investors had elected to take cash, the SEC later told a court. Broadstreet said it would distribute the cash and stock this year. When the time came in May 2026, Broadstreet took the cash option off the table, telling every investor that the fund could force them to take stock.
When it was tapped for the Russell 2000 in May, Z Squared had yet to report any financial statements. FTSE Russell told Barron's that the information available at the time satisfied Russell's eligibility and investibility criteria.
Z Squared's June-quarter financial statements did appear on Aug. 13. The balance sheet carried the crypto mining fleet at \$12.4 million, or \$1,269 per unit.
That was less than 1/50th the value ascribed in the merger, two months before.
Z Squared CEO David Halabu told Barron's that CohnReznick estimated the fair market value of the company's crypto mining operations, not the cost or resale value of the machines.
A large market value is hard to see in Z Square's only public financials. In the June period, it lost money on its Doge mining activities.
“Altcoin mining economics have deteriorated sharply with underlying token prices falling precipitously," Halabu said. "Some miners have shut down operations entirely."
As a new initiative, Z Squared hopes to develop data centers for artificial-intelligence computing. The crypto mining fleet isn't suited for AI modeling, says Halabu.
Z Squared shares have plummeted to \$3.95 from \$18.80 since their April debut, even though company filings say it gave slugs of stock to Najarian and others, under contracts to promote the stock at the NYSE, in broadcasts, and online. Inquiries to Najarian's investor relations business weren't answered.
Broadstreet, meanwhile, has been working to redeem most of its remaining investors by giving them stock in Soulpower, a SPAC that said in November of last year it will merge with a business that would contribute a British Virgin Islands banking license, land and mines in places like Mexico and South Africa, and 23 properties in the Carolinas from Contender Development, a company that Feingold told the court he partly owns. Drawing on another CohnReznick appraisal, Soulpower said the resulting company would be worth over \$8 billion.
“SOUL will be the most loved bank on earth,” said Soulpower CEO Justin Lafazan in that November deal announcement. He declined to discuss the Broadstreet exchange deal with Barron’s.
At the same time, Broadstreet is suing five investors who continued demanding cash instead of Soulpower stock. The firm seeks a court ruling that it can redeem them with stock. It is also suing an investor for defamation over comments she posted on X.
As Broadstreet executes its plans to rid itself of outside investors, the SEC has renewed its request for the judge to appoint a receiver who would take control of the private-equity investments. If not stopped, the agency told the court on Sept. 10, the investors will end up with locked-up shares of Z Squared and Soulpower, while Feingold, the Baldassarra brothers, and other Broadstreet insiders end up with the remaining cash and assets.
"The manager does not have the power to redeem investors with anything it wants, like bags of rocks," said the SEC in its September court filing. "All of this is the natural result of a fund that promised and paid returns it could not afford to pay." B
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t's a niche but growing part of the agentic craze: using artificial-intelligence bots to trade stocks with little to no human intervention.
Since Robinhood Markets launched agentic trading in May, more than 150,000 customers have opened agentic trading accounts, according to the company. AI agents use Robinhood's tools almost 30 million times a day. A month after brokerage firm Public made AI agents available to all users, customers created 20,000 agents and more than \$200 million in assets are overseen by AI agents, according to Public.
But do they work? And can they beat the market? That has been more mysterious; agents' trading habits have been a black box. But a new report from Condor Capital Wealth Management, which has studied robo-advisor returns for years, sheds light on these agents as traders. Barron's got an exclusive look at the data.
Condor gave three AI agents \$500 each and provided the same daily prompt: Make as much money as you can. Their behavior offers a sneak peek into the future of agent-led trading, a world in which automated bots use sophisticated AI models to buy, flip, rebalance, and harvest tax losses. All before your stockbroker wakes up.
The agentic trading tests conducted by Condor involved Anthropic's Claude, Alphabet's Gemini, OpenAI's ChatGPT, and accounts at three brokerage firms: Robinhood, Webull, and Public, which have all turned on the ability to plug AI models into dedicated agentic accounts. (Other firms, including Interactive Brokers and eToro, are also now offering agent plug-ins.)
For now, at least, those brokers can rest easy. The agents aren't generating a significant edge. After three days of trading, returns for Claude and Gemini were $2.9\%$ and $0.9\%$ , respectively. ChatGPT posted a loss of $0.7\%$ .
In the trading test, Condor told agents to use stocks and exchange-traded funds only, and return to 100% cash by the close of each trading session.
Each agent also scheduled its own cadence for check-ins and trades. Condor says Claude and ChatGPT tried similar approaches, searching the web for what profitable traders supposedly do; that led them to loosely copy a kind of momentum trading strategy. Gemini checked in a handful of times a day, never set a stop, and only ever traded Nvidia shares.
Claude scheduled for itself 10 check-ins a day and journaled lessons to itself. For example, when Claude bought into the top of an opening spike and had to sell at a loss, it wrote the mistake into instructions that Claude prepared for itself, Condor says. The following day, Claude canceled two orders rather than chase a big rally at the open. “It noticed something, wrote it down, and behaved differently the following day,” states Condor’s research report. “The loop is simple, but it offers a glimmer of what self-learning agents will eventually be able to do.”
Condor cautions that the test was intentionally simplistic. Given detailed and continuously updated instructions, the agents might perform better. But that would mean more work and, importantly, judgment on behalf of the user.
"The average person who needs money management does not want to manage a system to that level of detail, so the agent is worth the most to the people who need help the least," says Condor's report.
The tests come with agentic technology poised to play a greater role in the investing experience. Some brokerage industry executives and analysts think it could lead to higher trading volumes as more investors begin using AI for research, automation, and other tasks.
Yoni Assia, CEO of brokerage firm eToro, says trading volumes typically rise in the morning and fall at night. "But for agents, there is no morning or night," Assia says. "It can trade all the time."
Agents, to be sure, aren't just day traders. They can also be used to set asset allocations and long-term portfolio construction. In a separate test, Condor tasked multiple AI agents with creating a 60/40 portfolio composed of stocks and bonds. Claude, ChatGPT, and Gemini picked the funds and decided when to rebalance. In each instance, they bought only a handful of low-cost index funds from Vanguard and BlackRock's iShares. All three agents chose Vanguard's low-cost Total Stock Market ETF and its Total International Stock ETF. Who would've guessed Claude was a Boglehead?
Leif Abraham, co-founder and co-CEO at Public, says customers who have started using AI agents are moving more assets to Public than those who haven't begun yet. He doesn't think it's a short-term trend. "Once you start using the AI agents, you're not going back," he says.
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Condor's AI tests follow a similar approach to what Condor took with the robo-advisor reports that the firm began producing a
Condor's AI tests follow a similar approach to what Condor took with the robo-advisor reports that the firm began producing a
that the firm began producing a decade ago. Condor opened accounts at robo-advisors with real money and tracked the results to see how well a new technology could manage a portfolio on behalf of investors. Condor's robo report was the foundation of Barron's ranking of robo-advisors.
Condor's tests come with some caveats, such as a short testing period and small balances. Given rapid advances around AI, the same test could yield different results next year, or even next month. "It's pretty powerful, you can do a lot with it, but it is still very early days," says David Goldstone, manager of investment research at Condor.
Executives from Robinhood, Webull, Public, eToro, and Interactive all told Barron's that agentic trading remains a niche activity, but they see applications for a mainstream audience on the horizon.
As for the AI labs, OpenAI and Alphabet didn't respond to questions about agentic trading. Anthropic declined to comment.
The do-it-yourself agent movement may turn out to be a brief moment in time. Condor's testing suggests that
To test a new class of AI agents, Condor Capital deposited \$500 at a brokerage firm and gave each agent simple instructions: Make as much money as you can in three days. | Return on $500 | Self-chosen check-in cadence | Tickers traded | Claude Opus 5 | 2.9% | 10 scheduled check-ins per day | NVDA, SOFI, HOOD, PLTR, INTC, MARA | ChatGPT-5.6 Sol | -0.7 | Every 5 minutes, about 75 per day | NVDA, IWM, MSFT, AMZN, PLTR, AMD, QQQ, CMG, SHOP | Gemini 3.1 Pro | 0.9 | 5 to 8 per day | NVDA | Source: Condor Capital Wealth Management
Condor tasked AI agents with constructing a 60/40 portfolio of stocks and bonds. Every agent chose low-cost index funds. | Ticker (Role) | Percentage of Portfolio |
Claude Opus 5 | VTI (U.S. total stock market) | 40% | VXUS (International stocks (ex-U.S.)) | 20 | VTEB (Muni bonds) | 40 |
DIY agentic trading, which uses so-called model context protocol, or MCP, isn't for the average person. It requires modest technical skills to set up, and investing savvy to direct the AI bot.
"This stuff is really powerful for people interested in doing this sort of thing and who know what they are doing, or are willing to get themselves into a little trouble," says Kristopher Jones, Condor's business innovation strategist who was involved in setting up the accounts. It isn't an out-of-the-box solution.
But the barrier to broader adoption is starting to come down. Public already makes AI agents available via its platform, in addition to the MCP option. Public's Abraham says that its proprietary AI agent offering can be easier to use for some customers, and that the firm has access to data sources that outside AI chatbots might not. The human user still has to approve an AI's actions at Public.
Abraham says AI agents are skilled at turning a customer's investing idea into an actionable plan. “They aren't designed to give you ideas,” he says. “There is an important nuance there. You have a kernel of an idea of what you want to do, even if you haven't fully formed the idea of how you want to do it, and the agent can help you.”
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This past week, Robinhood unveiled Robinhood Agents, an agentic trading offering available via the company's
This past week, Robinhood unveiled Robinhood Agents, an agentic trading offering available via the company's
app that allows users to chat with AI agents to research, develop trading strategies, and execute trades in dedicated agentic accounts. The agent can access funds only in a user's dedicated agentic trading account, and users can choose to manually approve each trade. Robinhood allows users to choose from a lineup of existing AI models, including ones from OpenAI. The MCP option remains for users who want to connect their own third-party agents, but Robinhood executives believe that Robinhood Agents will become the preferred agentic trading method for most customers.
"[The MCP option] is complicated; it involves using multiple devices and different apps," said Abhishek Fatehpuria, vice president of product management, at a company event unveiling Robinhood Agents. "And oftentimes the connections between these different apps are slow and brittle."
Anthony Denier, group president and U.S. CEO of Webull, says his company is also working on embedding agentic trading in its platform. He believes that will lead to greater adoption because there are a finite number of investors willing to do the work to connect their own AI agents through an MCP. “When the agent is directly accessible on the platform itself, then the TAM [total addressable market] explodes,” he says.
At Webull, customers using an agentic account have to approve transactions themselves and be logged into their account. "They can't set it up and go on vacation," Denier says.
Brokerage industry executives say they're getting increased demand from customers for AI tools. They are contemplating a future in which all investors interact with their brokerage accounts via an AI chatbot, even if they aren't using it to execute trades.
Webull's Denier compares it to the transformation driven by the internet and smartphones. “I think in five years’ time, the majority of transactions will happen through an on-platform agent,” he says. “That is a huge shift in our business. If we aren’t ahead of that now, if we aren’t building that experience now, then we will fall behind.” B
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A Divided Stock Market Could Set Up a Serious Rally
A Divided Stock Market Could Set Up a Serious Rally
Yes, the market is being led by a handful of highfliers. But that isn't a bad thing.
●
BY ALEX ROSENBERG yawning gap has opened up inside the stock market that to some looks like an abyss. We see an opportunity.
On the sur-
face, the stock
market is doing just fine. The S&P 500 index ended September with a loss of just 0.5%, and is less than 1% below the record high it set in August. That's certainly better than might be expected, given that the Federal Reserve has started raising interest rates, the 10-year Treasury yield just hit its highest level since 2002, and the Iran war continues with no end in sight, giving a boost to energy prices. Meanwhile, there are still lingering questions about the artificial-intelligence trade, from the fundamental—how will Anthropic and OpenAI turn a profit?—to the existential—will artificial intelligence mean the end of humankind?
A glimpse beneath the surface reveals that these concerns are affecting stocks—just not at the index level. While the market-cap-weighted S&P 500 fell 0.5% in September, an equal-weighted version dropped 5% and is on pace for its seventh straight weekly loss, a losing streak previously seen only in 2002 and 2022.
It gets worse. Not since 2000 have more S&P 500 stocks made 52-week lows than 52-week highs when the overall index was within 2% of a record high, according to BTIG Chief Market Technician Jonathan Krinsky, an ominous sign for a market that has drawn more than a few comparisons to the dot-com bubble.
The divide in the market is wide and getting wider. Out of the 11 S&P 500 sectors, only information technology and communication services rose in September. Chips, though still down from their record high, contributed, too, with the PHLX Semiconductor Index surging 9.5% in September, while the Roundhill Magnificent Seven exchange-traded fund rose 4.3%. And it's impossible to overstate the impact of Meta Platforms, whose 27% September Muse-inspired rally added 0.6% to the S&P 500's monthly performance.
Some worry that this strange dynamic presages a broader decline for the S&P 500. Krinsky acknowledges that beaten-down sectors could bounce, but says the most likely scenario is that “the leaders succumb and major indexes catch down to what the majority of stocks have been doing.” Famed bond investor Jeffrey Gundlach describes the problem in arboreal terms, telling David Rosenberg that, like a particular century-old silver maple in his yard, the market has hollowed out after rotting from the inside and is now “on the edge of complete failure.”
The market's bad breadth, however, looks quite different from other episodes of narrow markets. Investors aren't simply bidding up a small set of winners into nosebleed territory. Nvidia, the world's biggest stock, has seen its price/earnings ratio fall below the overall market's even as it has rallied $24\%$ this year. Meta's valuation has fallen this year, as well, despite its September surge. That's in contrast to the dot-com bubble, when the valuations of heavyweights like Microsoft and Cisco Systems surged.
The poor breadth also looks more rational this time around. Rather than the bifurcation between the “old” and “new” economies seen during the dot-com bubble, investors are trying to gauge the winners and losers of AI in real time. Take the Meta rally. As that stock soared, shares of companies like Planet Fitness and New York Times stumbled, hit by fears that the new personal AI agent, Muse, will help paying customers cancel subscriptions to services that they no longer use. Charles Schwab and Bank of America, meanwhile, dropped over concerns that the technology would flush investor cash out of ultralow-yielding accounts. Investors aren’t gripped by some speculative frenzy; they’re articulating a holistic and reasonable thesis about the winners and losers in an AI-driven economy.
A similar dynamic is playing out elsewhere in the market. The surge in the price of diesel has benefited refiners like Valero Energy and Phillips 66, which hit fresh all-time highs last month, while air carriers like JetBlue Airways and American Airlines Group have been struggling. And while rising rates are generally negative for equities, a higher-yield environment is certainly harder on companies that have large amounts of floating-rate debt, or whose potential cash flows are many years away.
“Maybe the real theme,” says John Marshall of Carrick Lane, “is that the trends that are most prominent in the market now all have winners and losers.”
Stocks Shrug as Bonds Shake
The bond market's volatility isn't being reflected in the VIX.
Just four stocks are responsible for almost half of the S&P 500's year-to-date performance.
YTD contribution to S&P 500
Note: Data are as of Oct. 1
Sources: Bloomberg, Barron's calculations
Perhaps the focus on market breadth, then, is missing the point. Owen Lamont, portfolio manager and researcher at Acadian Asset Management, says it's “crazy” to argue that the stock market is risky just because it's highly concentrated. “If you took the Magnificent Seven, and broke each into seven smaller firms so it was the Magnificent 49, why would that be any better?”
The historical record suggests that breadth isn't the bad omen that you might think it is. "It's always preferable to see a market rally on broad participation rather than a small group of stocks, and the durability of narrow rallies is more dependent on that narrow group of stocks," writes Bespoke Investment Group. "Contrary to popular wisdom, though, weak breadth alone hasn't been a reliable bearish short-term signal. In prior periods when breadth deteriorated but price held up relatively well, forward returns saw little in the way of a negative impact."
After all, indexes, unlike silver maples, are recomposable. As failing companies lose value, they are replaced within the index by up-and-coming names—not because the index masters are betting that these incoming companies will outperform the outgoing ones, but simply because they’re striving to maintain an index that continually gives the most accurate read on the segment of the market in question, such as large-cap U.S. stocks in the case of the S&P 500. Out of the 500 companies originally included in the S&P 500 in 1957, only about 50 remain. Like Theseus’ ship, the market keeps sailing on.
And the weather might soon get more temperate. Like Krinsky, Morgan Stanley Chief U.S. Equity Strategist Mike Wilson believes that “the divergence between the index and breadth must be reconciled,” and he says the most likely scenario is that the overall market will slip in the weeks ahead. But he remains fundamentally bullish. “If bond volatility doesn’t calm down, we see breadth and price meeting in the middle in the next month followed by a strong finish to the year,” Wilson writes. “If bond volatility subsides sooner, breadth is likely to catch up to index price, driving both higher in the near term.”
One thing that could calm the bond market is a resolution to the conflict in Iran. “I’m in the camp that we’re going to find a solution in Iran,” says KKM
Financial CEO Jeff Kilburg. “I think we get out this month, and then we see crude oil crack, and we see rates crack,” with the 10-year yield falling back below 5%.
Another catalyst: the start of earnings season. It's a truism on Wall Street that investors seem to worry about all of the macro headwinds during the months between earnings seasons, only to be reminded just how good they have it when the next crop of reports comes around. And third-quarter earnings season should be better than good. Analysts collectively estimate that S&P 500 companies will report year-over-year earnings growth of $29\%$ for the quarter, which would mark the third-straight quarter of earnings growth about $25\%$ , according to FactSet.
A cooling-off in oil prices and rates, "in conjunction with earnings season showing us yet more $25\%$ -plus profit growth, is the catalyst for a run-up to 8000 in the S&P," Kilburg says, referring to a level $4.4\%$ above Thursday's close.
Finally, the overhang of the midterm elections will pass after Nov. 3. “Historically, U.S. equity volatility has tended to rise in the months leading into the midterm elections,” writes Dubravko Lakos-Bujas, head of global markets strategy at J.P. Morgan. Given that implied volatility has remained remarkably low, he does think there’s room for the Cboe Volatility Index, or VIX, to rise from here. But he adds that the elections “should serve as an important market-clearing event. Historical performance in the months following the midterms tends to be positive.”
The great hope is that all of the major drivers of macro uncertainty will recede, while companies continue to report boffo earnings. That may be a bit too much to expect. But we do know that overall stock market valuations have fallen meaningfully this year, and have continued to decline during the past eight weeks of market churn.
Far from being complacent, investors are acutely aware of the pressures caused by rising rates, which is why the average stock has performed so poorly. In fact, according to Goldman Sachs, overall U.S. equity sentiment has fallen sharply into the negative, and is now as low as it was in March. As long as the AI narrative holds together, and earnings aren't terribly disappointing, the market is setting up for strong close to 2026.
Even if the rising tide doesn't lift every stock. B
Focused Funds Can Help You Navigate a Top-Heavy Market
Focused Funds Can Help You Navigate a Top-Heavy Market
How a “core and explore” approach, with index funds at the core, could give investors an edge in a market dominated by an increasingly small group of technology names.
Y
ou can't time the market. But maybe you can increase your upside or limit your downside with a concentrated fund.
Anyone watching the market knows that a mere
handful of stocks have accounted for most of the gains in recent years. It isn't a novel phenomenon. In fact, it has been true for at least a century. And that fact should make many investors take another look at their stock fund strategies.
From January 1926 through December 2025, just 46 stocks—out of 29,754 common stocks listed on the public U.S. stock markets over that period—accounted for half of the \$91 trillion in net wealth creation, according to a study published in March titled “One Hundred Years in the U.S. Stock Markets.” Worse, the median buy-and-hold return for all those stocks was a negative 6.9%.
The study's author, Hendrik Bessembinder, a professor of finance at Arizona State University's W.P. Carey School of Business, calls people's reaction to his findings a “Rorschach test” of their investment styles. “For the large majority of investors, the evidence just strengthens their view about the desirability of a well-diversified, low-cost portfolio without a lot of trading,” he tells Barron's. “My evidence says if you pick 10 stocks at random, most likely you're going to underperform.”
Yet other investors are looking for a big hit. “The chances of getting a 100-bagger are much better if you pick one or two individual stocks and try to find the next Amazon.com as opposed to buying the whole basket,” Bessembinder says. This group either does their own stock-picking or hires skilled money managers who hold a concentrated portfolio of just a few hoped-for outperformers.
Vanguard Group founder Jack Bogle argued against searching for needles in a haystack in favor of “buying the whole haystack” with a broadly diversified index fund. Yet searching for a few needles with a top focused-fund manager can help amplify returns in the good times or buffer a largely indexed portfolio in the bad.
"It isn't an either/or decision," says Jason Subotky, co-manager of the AMG Yacktman Focused fund.
“You could be largely indexed, but then still have exposure to the managers that you know are doing something to add value significantly.”
Such a strategy is known as “core and explore” on Wall Street.
"If you look at the lost decade from the end of the 1990s to the end of 2009, that's what really helped people discover us because we were able to generate very strong returns against an index for the S&P 500 that went nowhere," Subotky says.
From Dec. 31, 1999, through Dec. 31, 2009, Yacktman Focused gained a cumulative 206% while the Vanguard 500 Index fund lost 2%, according to Morningstar. Then again, if you look at Vanguard 500 from Dec. 31, 2009, until today, it gained 832% versus Yacktman's 569%. Clearly, there are advantages to owning both funds, although it's notable that Yacktman won over the entire period, up an eye-popping 1,944% versus the S&P 500 fund's 811%.
Then there is the question of how to index. While the largest companies have recently outperformed, that hasn't always been true. "For most of history, buying the largest stocks has been a notably bad investment," says Bessembinder. If it's impossible to predict which stocks will win in advance, a better index strategy might be to equal-weight stocks instead of piling into the largest ones, as market-cap weighted indexes like the S&P 500 do. A few focused funds paired with an exchange-traded fund like Invesco Russell 1000 Equal Weight could be one way to square the circle.
An index fund core helps because focused-fund returns tend to be “lumpy”: Even the best funds often have bouts of underperformance followed by dominant periods. But the worst funds can be extraordinarily volatile from being too concentrated in risky companies. (For this article, we define “focused” as funds with 50 stocks or fewer.)
Good focused funds tend to have one factor in common—a penchant for high-quality companies with strong businesses and clean balance sheets. "We generally talk about quality companies that have staying power," says Tom Hancock, co-manager of the GMO U.S. Quality ETF, which currently holds 43 stocks. These are businesses he can picture being “relevant and vibrant five to 10 if not 100 years out.”
GMO's \$5 billion ETF, which launched in 2023, is similar to its older institutional-only mutual fund, GMO Quality, which has beaten the S&P 500 index and $94\%$ of its peers in Morningstar's large blend category with a $16.1\%$ 10-year annualized return.
Although valuations matter to Hancock, he subscribes to Warren Buffett's philosophy that it's better to buy a wonderful company at a fair price than a fair company at a wonderful price. "If you're thinking with a long time horizon, the entry-point [valuation] doesn't really matter as much," he says.
Hancock holds different buckets of stocks. There are quality growth stocks like Microsoft and Alphabet and core quality “stable ballast” ones such as Johnson & Johnson and Procter & Gamble. (Quality value refers to temporarily out-of-favor companies in cyclical industries.)
Some companies shift from one category to another. Software names Accenture and Salesforce are now considered value stocks. “Two or three years ago, we would have called those uncontroversial growth companies, and today they’re under a big cloud,” Hancock says. He calls the threat to them from artificial intelligence “overblown.”
Because value and growth styles go in and out of fashion, a focused fund ideally should incorporate both strategies, as does GMO's ETF, so returns are less lumpy. The JPMorgan Equity Focus ETF typically invests in the 20 best large-cap ideas from J.P. Morgan Asset Management's growth team and 20 from its value team, and tilts the portfolio slightly toward growth or value in different market environments. Manager Felise Agranoff runs the growth side of the portfolio and Jack Caffrey, the value. Both have over two decades of experience at J.P. Morgan and work with some 50 analysts and another co-manager, Graham Spence, to research companies.
Having such a deep analytical bench gives Agranoff the confidence to invest 9% of the fund's portfolio in AI chip maker Nvidia. "Our views on Nvidia have evolved over time," she says. In 2023, when the ETF purchased the stock, "we were extraordi-
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narily bullish because we felt the market underappreciated both the magnitude and duration of spend around generative AI and Nvidia's dominant position." Since then, based on valuations and the competitive outlook from rivals like Broadcom, she has adjusted her position, adding to it recently as the stock price came down.
Although the ETF can tilt toward value, as it did in early 2026, Caffrey tends to hold smaller individual positions. Value stocks are more cyclical than growth ones, so being too exposed to any individual one could be riskier. Still, in economically sensitive sectors, he holds the highest-quality names like Morgan Stanley in financial services and ExxonMobil Holdings in energy.
While a core focused fund offers balance, if you want that “100-bagger” stock, you could tilt toward a growth or value fund depending on market conditions. No question, the Alger Focus Equity mutual fund and its newer companion ETF, Alger Concentrated Equity, have been on fire lately.
Alger Focus Equity, with just 42 stocks and a 47% tech weighting, has beaten 97% of its peers in the past 10 years with a 21.7% annualized return.
It is run by co-managers Patrick Kelly and Ankur Crawford, while Alger Concentrated Equity holds 30 stocks and is run by Crawford alone. Launched in 2024, the ETF has a lower $0.56\%$ expense ratio, but a higher $14.8\%$ Nvidia weighting versus the mutual fund's $12\%$ .
Yet Crawford isn't afraid of drilling down into lesser-known names. The ETF holds shares in three private companies: Anthropic, Figure AI, and VAST Data. “Figure AI is one of the leading humanoid companies in the U.S., and we're just at the very beginning of the humanoid revolution,” she says. “The use of robots is going to allow us to have an industrial renaissance in the U.S.”
Still, one should expect more lumpiness with such a tech-heavy fund. In 2022's bear market, when highly valued growth stocks crashed, Alger Focus Equity fell $36.0\%$ compared with the average large-growth fund's $-29.9\%$ and the S&P 500's $-18.2\%$ .
The PGIM Jennison Focused Value and Putnam Focused Large Cap Value ETFs have a more balanced approach toward concentration. Neither takes big sector bets against
their Russell 1000 Value benchmark, which recently held 21% in tech. Although value stocks in general did better in 2022, Putnam Focused Large Cap Value stood out, with only a 2.6% loss, while PGIM Jennison Focused Value's parent mutual fund, which will merge with the PGIM ETF in November, lost 11.1%.
Neither fund is what one would call a deep value or classic value fund because of their emphasis on high-quality stocks. Both portfolios have average price/earnings ratios around 17. That's less than the S&P 500's 20, but higher than the long-term average 16 P/E for stocks in an already pricey market.
Contrast that with AMG Yacktman Focused's 12.6 average P/E or Davis Select U.S. Equity's 12.8 P/E. But you have to accept the lumpiness. Subotky and manager Stephen Yacktman say they held their top AI stock darling, Samsung Electronics, for about a decade before it did much of anything.
Meanwhile, Davis Select manager Chris Davis' largest position, Capital One Financial, has sunk recently because investors are worried about the integration of its most recent Discover acquisition and exposure to sub-prime debt. But Davis thinks the company's true value in an AI-besotted
Index Funds | Fund / Ticker | Morningstar Category | No. of Stock Holdings | 1-Yr Return | 5-Yr Return | 10-Yr Return | 15-Yr Return | Expense Ratio | 5-Yr Volatility | Invesco Russell 1000 Equal Weight / EQAL | Mid-Cap Blend | 1,011 | 13.2% | 6.9% | 10.1% | N/A | 0.20% | 16.4 | Vanguard S&P 500 / VOO | Large Blend | 500 | 17.0 | 13.6 | 15.3 | 15.5 | 0.03 | 15.8 | Note: \*With the cheapest stocks or more volatile small-cap stocks, it's best to own ETFs that have more holdings. Returns are through Sept. 28. Five-, 10-, and 15-year returns are annualized. Volatility is a measure of standard deviation. N/A=not applicable Source: Morningstar Direct
market is misunderstood. “Capital One is the original and most successful fintech company,” he says. “It was started as a data science company and is run by data scientists. It’s in the top 10 of all companies for holders of AI patents and machine learning patents.”
Such a technological edge makes it a better credit-card lender than competitors, Davis argues. “Financial services companies are basically in the business of pricing risk,” he says. “The better you use information and data, the better you can price risk.”
The greater the real or perceived risk in a company, the more volatile the returns. Some might argue that for cheaply valued companies with some warts, it's better not to be so concentrated. Meb Faber typically holds 100 stocks in his deep-value ETFs Cambria Shareholder Yield and Cambria Global Value, which have been strong but volatile long-term performers. He argues that his ETFs differ greatly from most large-cap U.S. stock funds by holding smaller, cheaper, and often foreign companies.
“If you’re going to charge more than zero, you’d better be concentrated in different stocks,” he says. But holding 20 stocks in his style would “introduce a ton of variability” in returns.
Value stocks tend to have smaller capitalizations than growth ones because they have been beaten up. But any small stock can prove too volatile for extremely concentrated portfolios. Morningstar categorizes Paradigm Select as a mid-cap blend fund, but it has almost half of its 50-stock portfolio in small and microcap stocks. “I don’t want to be overconcentrated,” says Amelia Weir, who co-manages the fund with her mother, Candace Weir. “Sometimes you have to let your winners run, but I’d say 50 to 60 stocks” is ideal.
In a perfect world, no single position would get above 5%, Weir says. But one reason the fund is in the mid-cap range now is that its AI-related stocks like Lumentum Holdings and Marvell Technology have done so well, up 473% and 203%, respectively, in the past year. Lumentum is now almost 8% of the fund.
Therein lies the conundrum for a concentrated fund manager: You don't want to own too much in a volatile stock, but you never know if you might own the next Amazon. B
FUNDS QUARTERLY
Bitcoin Funds Battered Bond Funds in the Third Quarter
R itcoin funds won the third quarter, and bond funds lost—even as stocks kept going up.
Bonds are a portfolio's ballast, but their bête noire is rising interest rates,
which have surged because of inflation from the Iran war and years of deficit spending. The \$399 billion Vanguard Total Bond Market exchange-traded fund fell 3.4% in the quarter, just edging out the 3.5% average fund loss in Morningstar's intermediate core bond category. High rates and inflation are usually bad for stocks, too, although the S&P 500 index was up 2.3%.
Inflation at 3.4% isn't as bad as it was in 2022, yet the 10-year Treasury note yield recently crossed 5%, a level it hasn't seen since 2007. Meanwhile, 30-year mortgage debt rates have topped 7%, a rate which hasn't been typical since the 1990s, other than a few blips. Maybe the 1990s' dot-com bubble is instructive—high rates alone didn't stop that stock market freight train, either. Earnings misses, accounting scandals, a terrorist attack, and bankruptcies did.
Still, mortgage debt issuers with high credit quality are guaranteeing an annual return of 7%, and existing bonds that were issued at lower rates in the past are being sold off. The average fund in Morningstar's government mortgage-backed bond category fell 4% in the quarter, and the iShares MBS ETF lost 4.2%. Meanwhile, long-term bond funds, which are the most sensitive to rates, fell 6.9%. Interestingly, tax-free municipal bond funds fell more than traditional ones, in part because of excessive issuance.
Despite the poor performance, investors continued to add new money to bond funds in July and August,
especially the intermediate core category, which saw \$26.6 billion in new inflows, and the Vanguard Total Bond Market fund, which took in \$5.8 billion. (September asset-flow numbers weren't yet available.)
After a strong first half of 2026, small-cap funds of every category fell in the third quarter, the worst being small growth funds, down 9.6% on average. Small companies are more dependent on debt financing to grow, so rising rates hurt them more than large, well-established companies. The largest small-cap ETF, the \$103 billion iShares Core S&P Small-Cap, de-
clined 8% in the quarter after surging almost 20% in the previous one.
The worst-performing fund category in the quarter was utilities, down 11.6% on average. That's understandable, as utilities have bondlike dividend yields. But utilities are also the backbone of the artificial-intelligence data-center buildout, which requires massive amounts of energy. Virtus Reaves Utilities, which has an AI focus, had a bad quarter, down 13.9%. This could be either a buying opportunity for this fund or a warning sign for AI generally, depending on one's outlook.
There are also some interesting shifts in market leadership. While the average large blend fund was up 1%, and large growth, 1.2%, tech stock funds were down 2%, and healthcare ones were up 4.4%. Though the average large blend fund has a hefty 35% tech weighting, it also has 10% in healthcare stocks.
After years of being dead money, Big Pharma stocks like Merck and Johnson & Johnson came back strongly in the quarter. Merck was up 13.7% because of promising results for a new cancer vaccine that it partnered
The third quarter was bad for bonds and small-caps, but good for cryptocurrency, oil, and healthcare funds. | Fund / Ticker | Morningstar Category | Fund Assets (billion) | 3rd Quarter Return | YTD Return | Expense Ratio | Vanguard Total Bond Market / BND | Intermediate Core Bond | $399 | -3.4% | -2.8% | 0.03% | PIMCO Income / PONAX | Multisector Bond | 232 | -2.8 | -0.4 | 0.91 | Vanguard Information Technology Index / VGT | Technology | 171 | 5.2 | 33.8 | 0.09 | SPDR Gold Trust / GLD | Commodities Focused | 142 | 3.6 | -3.3 | 0.40 | Dodge & Cox Income / DODIX | Intermediate Core-Plus Bond | 110 | -4.2 | -3.4 | 0.41 | iShares Core S&P Small-Cap / IJR | Small Blend | 103 | -8.0 | 14.1 | 0.06 | Vanguard Intermediate-Term Tax-Exempt / VWITX | Muni National Interm | 89 | -5.1 | -3.4 | 0.17 | iShares Bitcoin Trust / IBIT | Digital Assets | 67 | 42.8 | -4.3 | 0.25 | iShares 20+ Year Treasury Bond / TLT | Long Government | 46 | -8.9 | -8.0 | 0.15 | State Street Health Care Select Sector SPDR / XLV | Health | 44 | 6.4 | 10.1 | 0.08 | State Street Energy Select Sector SPDR / XLE | Equity Energy | 40 | 16.3 | 40.1 | 0.08 | iShares MBS / MBB | Government Mortgage-Backed Bond | 36 | -4.2 | -3.3 | 0.04 | American Funds American High-Income / AHITX | High Yield Bond | 29 | -2.3 | -0.2 | 0.74 | VanEck Gold Miners / GDX | Equity Precious Metals | 27 | 16.5 | 2.1 | 0.51 | United States Oil Fund / USO | Commodities Focused | 2 | 37.9 | 110.5 | 0.86 | Virtus Reaves Utilities / UTES | Utilities | 1 | -13.9 | -10.1 | 0.49 | Breakwave Tanker Shipping / BWET | Commodities Focused | 0.2 | 423.1 | 4,000.6 | 3.50 | Note: Returns are through Sept. 30.
Source: Morningstar
with Moderna to develop. The share price for Moderna, which collapsed after Covid ended and more recently because of the current political administration's hostility toward mRNA vaccines, soared 175%.
This shift hasn't gone unnoticed. During the quarter's first two months, healthcare funds received \$3.8 billion in new investor money, reversing a negative trend in 2026. Though strong for the year, tech funds actually saw \$3.1 billion in outflows in August.
Yet the biggest winners by far were funds that invest in cryptocurrencies like Bitcoin. The \$67 billion iShares Bitcoin
Trust ETF was up 42.8%. The digital-assets fund category overall has behaved like a yo-yo this year, with the iShares ETF still down 4.3%. Despite the failure of the crypto-friendly Clarity Act to pass, crypto still rallied because President Donald Trump-aligned regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission stepped in with their own crypto-positive rule making. The fact that the Trump family has financial interests tied up with crypto doesn't hurt.
Also strong were commodities, particularly anything energy-related, because of the Iran war. The \$1.7 billion United States Oil fund, which invests in oil futures, was up 37.9% in the quarter and has surged 111% so far this year, with oil having recently crossed \$100 a barrel. The \$40 billion State Street Energy Select Sector SPDR ETF, which has 24% of its portfolio invested in ExxonMobil, gained 16.3%. Diversified commodities broad-basket funds gained 14.6% on average.
Continuing its crazy run, the \$190 million Breakwave Tanker Shipping ETF was the best-performing fund in the third quarter, surging 423% and up 4,001% for the year. It's the closest thing to a direct bet on the Iran war continuing as it invests in derivatives on crude-oil tanker freight rates. Since the Strait of Hormuz became perilous to navigate, freight rates have exploded.
Although they started the quarter strong, gold bullion and gold miner stock funds gave back some of their gains toward the end as the dollar strengthened on rising interest rates and amid an increased appetite for higher-yielding U.S. bonds. Investors may be on to something. B
THE ECONOMY
Consumer sentiment surveys paint a bleak picture right now, but spending remains brisk. Perhaps the problem lies with the surveys.
If Consumers Are So Down, Why Are They Spending So Freely?
If Consumers Are So Down, Why Are They Spending So Freely?
When the going gets glum, the glum go shopping. That seems to be
the way of many Americans these days. Leading surveys of their moods show them to be down in the dumps about either the economy or their own financial conditions. But that hasn't stopped them from spending—far from it, in fact.
For months, the releases on the University of Michigan's consumer sentiment survey and the Conference Board's polling on consumer confidence have been drearily similar. The September UMich survey found the second-lowest reading in the polling's history, going back to 1952. The Conference Board's data, released this past Tuesday, was also downbeat, even lower than during the pandemic in 2020 and the worst since 2014.
Yet other news this past week showed that Americans' spending has remained robust despite their sour mood. Personal spending was much stronger than expected in August, the Commerce Department reported, vaulting some $0.9\%$ .
The final release of second-quarter gross domestic product showed an upward revision to a 2.2% inflation-adjusted annual rate of growth, up from 1.5% previously reported. That mainly reflected a revised gain in personal spending, to 3.8% from 3.2%. Overall GDP growth was held down by spending for imports and a drawdown in inventories. Stripping away those factors, domestic final sales grew at a robust real 3.9% annualized, a substantial acceleration from the preceding two quarters' 2.4% and 0.5%, respectively.
BY RANDALL
W. FORSYTH
The easy answer to the disconnect between downbeat sentiment and robust spending is the so-called K-shaped economy. The vast disparity among Americans' incomes and wealth ought to end the dopey statements by TV talking heads about “the consumer” (but probably won’t). A widely cited study last year by Moody’s Analytics found that the highest-earning 10% of households accounted for nearly 50% of total spending.
Those wealthy cohorts also have the most assets, such as stocks and residential real estate, the appreciation of which has further supported their ability to spend. The top 10% of
U.S. households gained \$38.2 trillion in wealth in the year ended on June 30, according to recently released Federal Reserve data, as the S&P 500 index rose 21% over that span.
But that doesn't fully explain growth in spending. A report by Bank of America economists Shruti Mishra and Aditya Bhave released this past week found increased breadth in consumption, with a narrowing in “K-shaped spending dynamics” combined with a pickup in spending among less well-off households. That's based on the bank's aggregated credit-and debit-card numbers. They estimate that third-quarter spending grew at close to a 3.5% real pace, nearly matching the previous quarter's showing.
The BofA economists found that surging equity wealth pushed household assets to more than 10 times their liabilities, which they said provided a “continued tailwind for spending.” Those gains weren’t just in rich folk’s stock portfolios. Liquid assets such as bank deposits and money-market funds, which are probably more evenly distribution across the population, also are elevated versus liabilities. The economists warned, however, that a shakeout in artificial-intelligence stocks, higher long-term interest rates, or a more significant oil-price shock could pose a potential risk to spending.
That we're less happy than we used to be probably qualifies as a “No s—, Sherlock” observation. But these consumer surveys still are followed as indicators of future spending. Indeed, average consumer expectations for business conditions are one of the components of the Conference Board's Leading Economic Index, along with redoubtable measures such as new orders, building permits, and financial conditions.
The problem is, feelings don't matter much anymore, at least not as indicators of the economy. B
Note: seasonally adjusted annual rate in 2017 dollars.
Consumer Spending (trillion)
Widely followed surveys show that consumer attitudes have been depressed despite a good economy and stock market. That hasn't slowed down spending.
So, what really explains the evident split between the consumers' moods and their spending? Part of the answer may lie in the survey methods. Piper Sandler's economics team, led by Nancy Lazar, contends that its proprietary survey, which polls 500 different people nightly, versus 3,000 a month by the Conference Board and UMich's 1,000 a month, tracks historical spending better than those surveys. Recently, the Piper Sandler polling has shown people to be more upbeat and in sync with their spending than in the other surveys.
More broadly, the big economic sentiment indicators may have become unmoored from the actual economy. After all, they've been falling even with low unemployment, solid growth, and a record stock market. According to a recent report by Goldman Sachs economist Joseph Briggs and Sarah Dong, people's happiness deteriorated sharply in 2020 and hasn't recovered in tandem with the economy and the stock market. And that extends across all cohorts and political partisans, and among homeowners and renters alike.
Citing a paper from University of Chicago economist Sam Peltzman, the Goldman report said people have become more downbeat on the state of the world for reasons unrelated to the economy. That paper found that a decline in confidence in nearly all societal and government institutions since 2016 more than offset an improvement in finances. The sentiment surveys may reflect that general decline more than shifting views about the economy. Reps for the Conference Board and UMich surveys couldn't be reached.
The S&P 500 Consumer Staples stock index has returned more than 7% year to date, well ahead of its 3.9% gain for all of 2025. But the recovery has been wildly uneven.
Target shares have surged 60% this year, and Coca-Cola has gained 24%. Meanwhile, Cheerios maker General Mills and Campbell's, known for its canned soup, have both fallen about 27%.
The divergence creates opportunities for stockpickers like Ben Shuleva, consumer-sector leader at Fidelity Investments and co-manager of the Fidelity Select Consumer Discretionary Portfolio and Fidelity Select Consumer Staples Portfolio, with combined assets of about \$2 billion. Shuleva has managed the Consumer Staples fund since 2020. It returned 14.5% in the first eight months of 2026, outperforming the 9.9% gain in its sector benchmark, the MSCI US IMI Consumer Staples 25/50 Index.
Barron's spoke with Shuleva on Sept. 25 about how consumer spending trends, GLP-1 drugs, commodity inflation, and artificial intelligence are affecting staples stocks, and which names he finds most attractive. An edited version of the conversation follows.
Barron's: Consumer-staples stocks have been struggling. What could brighten this picture?
Ben Shuleva: The backdrop for staples is challenging. Unlike discretionary categories that can rely on the top 10% of consumers to spend and drive the business, the top 10% and bottom 10% of consumers generally use the same amount of toilet paper. So, the staples companies really need broad consumer health, and that isn't something we have today. But this doesn't mean there aren't opportunities in the sector.
We should think of staples as a seat belt: The best relative environment for staples is always a terrible environment elsewhere. Today's broader market is unusual in how narrow it is—both in market cap and what is driving the economic growth. So much is dependent on artificial intelligence. If any of the fears we have for the AI trade turn into real, concrete challenges, you would expect a flight to safety, and staples would benefit.
How will staples companies deal with elevated energy costs and commodity inflation?
Staples companies buy commodities and sell brands to capture the spread in between. Given persistent inflation, the cost side of the equation has gotten much worse, and companies will have to raise prices to manage margins. But consumers have been eating higher inflation for five to six years and volumes are already weak, so it's going to be challenging.
The industry will need more so-
Photograph by ALEX GAGNE
“[Coca-Cola] stock is up, but it still trades at a pretty big discount to some of the other best-in-class consumer companies.”
“[Coca-Cola] stock is up, but it still trades at a pretty big discount to some of the other best-in-class consumer companies.”
phisticated price-pack architecture to manage demand elasticity, which means keeping the same price points but offering smaller pack size. Many companies are already doing it. If oil stays at this level, many companies will have to make harder decisions over the next 12 to 18 months—decisions like rationalizing production capacity and closing plants—to improve productivity.
On the one hand, barriers to entry are coming down. AI can help new entrants go to market faster, with smarter and better content. On the other, leading companies use AI to bring innovation faster and save money.
We need to approach the question of AI's impact with humility and acknowledge that the outcome we predict today is highly uncertain. Twelve months ago, OpenAI launched instant checkout for ChatGPT and announced partnerships with retailers such as Walmart and Shopify. At the time, this was expected to catalyze AI disruption of retail. Just six months later, OpenAI said it would allow merchants to use their own checkout.
The risk I see is a change in how consumers discover products. When you shop on a retailer's website, you're shown sponsored products, recommendations, and advertisements throughout the purchasing process. Retailers monetize that activity at every stage.
When that product discovery occurs off-site or via an AI agent, the retailer doesn't engage directly with consumers and generate first-party data. Instead, it acts primarily as a fulfillment mechanism, and the funnel—be it ChatGPT, Claude, or Muse—is more in control of the higher-value piece of that transaction.
Without advertising, the e-commerce model doesn't really work. Even at Amazon.com, the majority of retail operating profit comes from advertising.
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Could the use of GLP-1 weight-loss treatments hurt food-and-beverage demand long term? I have described the potential disruption from GLP-1s as both big and
Could the use of GLP-1 weight-loss treatments hurt food-and-beverage demand long term? I have described the potential disruption from GLP-1s as both big and
small. The percentage of GLP-1 users is about 10% of the U.S. adult population, and it is growing as lower-priced options have become available. But the impact on food-and-beverage companies is probably less than we think. If we assume another 25 million Americans start taking GLP-1 drugs over the next five years and each reduces calorie consumption by 20%, that would translate into roughly a 30-basis-point annual drag on total U.S. calorie consumption. [A basis point is a hundredth of a percentage point.]
You have been fairly bullish on the beverage industry. Does the industry have a structural advantage over other staples markets? Consumer brands are living in an age of disruption. The barrier to entry has come down. New forms of advertising allow brands to target a hyper-specific segment of consumers with high conversion rates and direct feedback, while e-commerce eliminated the space constraints of bricks-and-mortar retail that favored large incumbents. This has been fueling the growth of many emerging brands.
E-commerce works well for lightweight products at a high price point. It is hard to make the model work for things that are bulky and heavy. Beverages are harder to manufacture [than packaged food], and distribution is a significant barrier to entry. It is much easier to get a snack on shelves at Walmart than have a cold beverage in a fridge at every 7-Eleven across the country. There are only three major national soft-drink distribution systems in the U.S.: Coca-Cola, PepsiCo, and Keurig Dr Pepper.
Coca-Cola and Keurig Dr Pepper are both top holdings in your fund. What makes them attractive? Coke is still robust. It's one of the highest-quality consumer companies in the world. It's winning in durable ways in a very advantaged category. The distribution advantage of Coke is even greater internationally. Just as an example, I climbed Mount Everest in 2022. On the hike up to base camp, you pass these local tea houses, and every tea house sold Coke and Sprite. The stock is up
[Coca-Cola shares rose more than 30% in the past year], but it still trades at a pretty big discount to some of the other best-in-class consumer companies such as Walmart, Costco Wholesale, and Marriott International. [Coke trades for 25 times the next 12 months' expected earnings.]
Keurig Dr Pepper is a more complex story. The company completed its acquisition of JDE Peet's in April, and is using that purchase to create a beefed-up coffee business that will be spun out in early 2027. There is a lot of deal-related complexity with that pending transaction, which makes it hard for investors to understand the business and price the stock. But that means opportunity. The stock has an attractive valuation, and there is an identifiable catalyst on the horizon. [Keurig Dr Pepper is trading for about 13 times forward earnings.]
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Constellation Brands and Diageo have suffered from a decline in alcohol sales. What is the investment outlook now?
Constellation Brands and Diageo have suffered from a decline in alcohol sales. What is the investment outlook now?
This year has been another disappointment. Expectations were high going into the year because poor weather and weak demand from lower-income and Hispanic consumers had hurt sales in 2025, setting a relatively easy bar for year-over-year growth. We also had the World Cup and America's 250th birthday this year. The hope was they would drive an inflection in alcohol volumes, but that hasn't happened.
Some of the structural headwinds are here to stay, and alcohol companies need to adapt. Diageo just hired a new CEO, and recently announced steps to cut costs and get lean. It is using the savings to reinvest in both the brands and price points.
Constellation has continued to gain market share in U.S. beer. It also has a new CEO, and I'm eager to see how he approaches this new reality in alcohol.
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You have cited the structural challenges facing the packaged-food industry. Yet, Mondelez International has been a top holding. What separates it from peers? Mondelez competes in more-indul-
You have cited the structural challenges facing the packaged-food industry. Yet, Mondelez International has been a top holding. What separates it from peers? Mondelez competes in more-indul-
gence-based categories such as chocolates and cookies, where brands and taste matter more to consumers and the barriers of entry are higher. When people want a chocolate cookie with cream inside, they buy Oreos. That's why private labels are far less penetrated in these categories than in the rest of packaged food.
Also, Mondelez has a lot of emerging market exposure. It isn't exposed only to slowing U.S. population growth and shrinking per-person calorie intake. The company has a huge business in India, the rest of Asia, and Latin America—all faster-growing markets than the U.S.
Mondelez has a lot of exposure to cocoa prices, which nearly quintupled from their 2022 lows to an early-2025 peak. That squeezed the company's margins and hurt its volumes. But high prices have been destroying demand and incentivizing supply, and cocoa prices are already down.
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Target is another of your top holdings. Is the retailer's turnaround working?
Target is another of your top holdings. Is the retailer's turnaround working?
Retail sales growth has become increasingly concentrated among a handful of major players, including Walmart, Costco, and Amazon. But there is still plenty of room to carve out a niche in retail if you know what sets you apart and execute well.
Target made several mistakes in the past three years and drifted away from what it did best. Recently, the company made some material changes to its management team. Target refocused its strategy, and there are early signs of success. Same-store sales have inflected hard lines. The toy business is growing by double digits. Target is pushing hard into beauty. The retailer is crushing it in niche categories like trading cards and has set up partnerships with viral brands such as Roller Rabbit and Pokémon.
The company is starting to find its magic. The stock has moved up in the past year, but the company is only two quarters into the turnaround, and sales and margins are still depressed relative to history.
Thanks, Ben. B
TECH TRADER
Semiconductor maker Micron Technology isn't receiving the support from investors it deserves following another stellar quarter.
Micron's Stock Is Cheap. Why Investors Are Still Gun-Shy.
Micron's Stock Is Cheap. Why Investors Are Still Gun-Shy.
n Wednesday, memory-maker Micron Technology reported another beat-and-raise quarter, with 379%
sales growth and an astounding 87% gross margin. But the stock went down initially before rising 3%.
Come Thursday morning, my inbox was full of questions that all boiled down to, “What gives with this stock?”
Micron stock is trading at only 6.4 times its projected earnings this fiscal year, which began a month ago, well below either the S&P 500 or PHLX/semiconductor, or SOX, indexes. It is particularly strange when held up against the Wall Street analyst consensus estimate for earnings growth of 126% in fiscal 2027.
More than any other tech stock, trading in Micron is about psychology, and all the abnormally large numbers in the world can't overturn some long-held beliefs. The stock has become a battleground between “this time is different” and “no, it isn’t.”
Single-digit forward price/earnings ratios are nothing new for Micron. Over the past 10 years, 54% of days saw its P/E under 10, and 27% were lower than today.
It all stems from the commoditized nature of the memory business. There have been wild swings in inventories and prices, which get reflected in Micron's financials as sharp fluctuations in sales growth and gross margins.
Micron has been subject to a phenomena known as the bullwhip effect.
BY ADAM
LEVINE
First identified by Massachusetts Institute of Technology business school professor Jay Forrester in 1961, the bull- whip effect is that the further upstream a supplier is from the end-user sale, the less visibility it has into demand, and the wider the oscillations are in inventories and, consequently, prices.
During the last cycle—from 2019 to 2023—most of Micron's sales were to consumer-electronics and vehicle manufacturers. These products go through multiple distribution layers after the memory leaves Micron's warehouses, and the demand signals get more opaque with each step.
In the last go-round, the inventory situation was further complicated by the supply-chain chaos and fierce
consumer goods demand during the Covid pandemic lockdowns. When that demand flagged, it was just as new memory manufacturing capacity was ramping up.
Inventories at Micron and its customers shot up, and prices collapsed. With sales contracting and inventory write-downs piling up, Micron had a negative gross margin in all the calendar-2023 quarters.
The stock peaked in early 2022, just a few weeks after Micron reported its first fiscal quarter of that year, which saw slight declines in sales growth and gross margin. Micron's forward P/E was 9.7 that day, not much higher than it is today. The S&P and SOX indexes both had P/Es that were more than double Micron's, the same as today. Even in the cyclical chip business, Micron and the other memory makers are a special case.
The old Wall Street maxim played out: The best time to buy cyclical chip stocks is when things go from horribly bleak to merely awful, and the best time to sell is when growth and margins are peaking. Many tech investors still feel pangs of regret from a cycle they mistimed, and have either sworn off the stock or are ready to jump ship at any sign of a cycle peak.
For those so inclined, they got that
Many tech investors still feel regret from a cycle they mis-timed, and have either sworn off the stock or are ready to jump ship at any sign of a cycle peak.
signal with Micron's guidance for the first quarter, with projected slight declines in earnings growth and gross margin. Déjà vu all over again.
But a lot has changed in the memory market since that last cycle. Memory is still a commodity product, but it is also one of the key chokepoints in the generational investments into AI data centers, which show no signs of slowing down.
Micron and its peers—SK Hynix and Samsung Electronics—were initially reluctant to invest new capital to meet data-center demand, and new manufacturing capacity isn't expected to begin providing supply-side relief until the middle of next year, with more slated for the following years.
Instead of riding fickle consumer demand, now data-center customers predominate, representing 63% of sales in the fourth quarter, rising from about a quarter of revenue in the last upcycle. There are fewer layers of distribution between Micron and the end customer in this market, and Micron has better demand signals. In this week's earnings call, CEO Sanjay Mehrotra said that fiscal 2027 would have an even tighter market for memory than 2026, with more price increases, and that the following year would be tighter still. "We do not have a line of sight to when supply and demand will get in balance," he said.
The stock was unmoved by that declaration. Micron has its best visibility ever into what long-term demand looks like. Like its competitors, Micron is using the extraordinary market power it has to push customers into five-year agreements with price floors and high price ceilings, and take-or-pay terms. Micron now has 26 of these contracts which constitute over a third of sales through 2030. The more it can add to that, the softer an eventual downcycle will be.
And that may be what it takes to convince some investors that Micron is worth more than a single-digit valuation multiple: a downcycle in which the average sales price doesn't collapse, revenue doesn't crater, and gross margins bottom at respectable levels. If Mehrotra is right, that may be years off. B
September 28 through October 2, 2026 | International Trader | P. 32 | Striking Price | P. 33 | Inside Scoop | P. 34 | 13D Filings | P. 34 | Winners & Losers | P. 35 | Market View | P. 36 | Statistics | P. 37 | ---
provide the piton that supports the stock market's next move higher.
By PAUL R.
LA MONICA
Really, the stock market shouldn't be holding up as well as it is. Oil prices remain persistently high, bond yields keep rising, and the Federal Reserve's next interest-rate hike remains a question of when, not if.
And yet the Nasdaq Composite gained 0.5% this past week, while the S&P 500 index dipped 0.3%. Only the Dow Jones Industrial Average, off 1.3%, suffered a healthy drop.
The market found reasons to hold up amid the economic data. A weaker-than-expected September jobs report, particularly slowing wage growth, helped soothe some investor concerns about inflation and interest rates, as the chance of the Fed raising rates in October and December tumbled on Friday. But optimism about corporate profits is lifting Wall Street's mood, too.
“We’re clearly in a higher inflationary environment,” says Marc Pinto, head of Americas Equities at Janus Henderson. “So, the question people have to wrestle with is, ‘What do we need for stocks to keep moving higher?’ The answer is earnings growth.”
So far, so good. Earnings might hold the answer for the stock market's remarkable resilience. Micron Technology's blockbuster report on Sept. 30 gave the market a glimpse of what is yet to come. The memory chip leader's results on guidance are a sign that spending on artificial intelligence is continuing at a robust pace. Investors will get a further glimpse at how companies fared in the third quarter this coming week, when Constellation Brands, Levi Strauss, PepsiCo, and Delta Air Lines release results. The market will be keeping an eye on these companies for clues about whether consumers continue to spend despite all of the pressure from rates and oil.
Earnings guidance will be key. Earnings for the S&P 500 index are currently expected to rise more than 25% in the fourth quarter, and 2027 earnings are forecast to increase 16%
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Special quarterly listings in WSJ & Barron's from 2026 levels, a slowdown from this year's estimates of more than 30% profit growth but still impressive. Joshua Wein, a portfolio manager at Hennessy Funds, said it's “hard to imagine earnings falling off a cliff in the fourth quarter and 2027.”
And it may be Big Tech's turn to shine. Of the Magnificent Seven, just three names—Apple, Meta Platforms, and Nvidia—have risen more than 10% this year. Tesla, meanwhile, has dropped, while Alphabet, Microsoft, and Amazon.com have posted single-digit gains. That has resulted in a group that now looks cheaper than it did at the start of the year: The Roundhill Magnificent Seven exchange-traded fund trades at 25 times earnings forecasts for the next 12 months, down from 32 times at the start of the year.
“We're overweight in large-caps and the megacaps, in particular,” says Todd Jablonski, global head of multi-asset and quant strategies at Principal Asset Management. “It's about minimizing volatility.”
So, leave the worrying to the other guy and enjoy the climb.
Do we call it a comeback? Cryptocurrencies enjoyed a renaissance in the third quarter. Bitcoin soared more than 40%, while Ethereum surged more than 70%. The rebound for digital assets may have only just begun.
Even after their stellar summer performance, Bitcoin and Ethereum prices both remain lower for the year. Citigroup research strategist Alex Saunders doesn't expect that to last much longer. He raised his base case 12-month price targets at the end of September to \$113,000 for Bitcoin, nearly 35% higher than its current level, and \$3,028 for Ethereum, more than 13% above where it's now trading.
His rationale? The increased pace of Treasury bond buybacks in recent months could eventually lead to lower long-term interest
rates and a weakening of the dollar, even though yields and the greenback have continued to march higher. Cryptos tend to benefit from the currency debasement trade.
Saunders also argues that the Securities and Exchange Commission's decision to step up with some favorable rules for cryptos in the wake of the Senate's failure to advance the crypto-friendly Clarity Act should give digital assets a further boost. “Durable legislation would likely offer greater policy clarity than agency-led rule-making, but the industry has taken the view to build now... and to create entrenchment that would be difficult to dismantle,” he wrote.
Retail investors are also taking advantage of the crypto resurgence to buy crypto ETFs as well as stocks with exposure to the Bitcoin boom. According to data from Coin-MarketCap Research, U.S. spot Bitcoin ETFs posted eight consecutive sessions of net inflows at the end of September. That has helped boost iShares Bitcoin Trust, Fidelity Wise Origin Bitcoin, Grayscale Ethereum Staking, and other funds.
Meanwhile, shares of top brokerage firm Coinbase Global are up 11% in the past three months, while Michael Saylor's Strategy has skyrocketed nearly 60% since early July as the company has resumed purchases of Bitcoin in recent weeks.
The rally in Bitcoin and crypto stocks has coincided with a “risk on” rally that has lifted the Magnificent Seven, cybersecurity stocks, and other tech names in the past few months, noted Jeff Weniger, chief investment strategist at Corgi Invest. Coinbase is the largest holding in the firm’s newly launched Corgi Crypto Infrastructure ETF. The fund also has positions in Robinhood Markets, Bitcoin miners BitMine Immersion Technologies and Hut 8, and stablecoin issuer Circle Internet Group.
“Bitcoin and other pieces of the crypto atmosphere turned on a dime over the summer and went vertical,” Weniger said.
Performance of the Dow Jones U.S. Industrials, ranked by weekly percent change.\*
Source: S&P Dow Jones Indices
ebullient mood for crypto could once again sour. But given that Bitcoin and stocks in the digital asset universe have rallied despite higher interest rates and a big legislative setback, it's hard to bet against that short-term momentum. The Bitcoin bulls have once again taken charge.
Micron, one of the world's leading memory chip makers and a poster child for the artificial-intelligence stock rally, reported earnings on Wednesday afternoon that topped forecasts. That should be good news for the Roundhill Memory ETF, one of the most successful ETF launches of all time.
The ETF, which traders often refer to by its ticker symbol DRAM, has come far since its early April debut, attracting \$26.6 billion in assets under management in its first six months. But the risks are high for the popular fund—thanks to its high concentration in Micron and a few other volatile stocks, questions about AI demand, and the growing number of competing funds.
Micron is the actively managed fund's largest holding, with a more than $26\%$ weighting, while South Korean rivals Samsung Electronics and SK Hynix make up the second- and third-largest positions. Combined, these three stocks account for nearly three-quarters of the fund's assets. That means there was a lot riding on Micron's results for the ETF.
DRAM's price has more than doubled since it launched, but is still nearly $25\%$ below its all-time high from June. That makes the fund even more volatile than the broader iShares Semiconductor ETF, or SOXX, which has Micron as its third-largest holding. The SOXX is about $10\%$ below its 52-week high.
Dave Mazza, CEO of Roundhill Investments, told Barron's that he isn't concerned about the big swings in memory stocks.
“Memory remains a compelling opportunity from a valuation standpoint,” Mazza said. “And while volatility comes with the territory, the flows we’ve seen during pullbacks suggest investors are treating them as entry points.”
He has a point on valuation. The DRAM ETF currently trades for just five times earnings estimates for the next 12 months, down from a peak valuation of 10 times earnings in June. This is also a much lower multiple than that of the S&P 500, which trades at 19 times earnings estimates.
Still, Micron and other memory chip companies have historically been highly cyclical. They often look cheap near a top—when they are in boom times and generating strong earnings. The question is how much longer this robust growth can last.
That's a question facing investors in several copycat memory ETFs that have launched since then, too, such as Tuttle Capital Concentrated Memory Stack, Kurv Memory Select, and Tema Memory. The Tuttle fund focuses more on picks-and-shovels plays that benefit from rising capital expenditure related to AI, such as chip and testing equipment companies and infrastructure firms like Advantest, Onto Innovation, and Penguin Solutions. The Kurv ETF leans heavily on the South Korean leaders, with more than $20\%$ of its assets in SK Hynix and another $7\%$ in Samsung. The Tema ETF has flash-memory company Sandisk, SK Hynix, and Japan's Kioxia Holdings as its top three holdings, which collectively make up a little more than half of its assets.
These smaller memory-focused ETFs could get a big lift if Micron's stock resumes its explosive rally and the rest of the tech sector follows suit. But so would DRAM.
The strong results from Micron could be the catalyst to reignite the memory chip rally and get DRAM back on track. B
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Argentine President Javier Milei is losing momentum a year before his bid for re-election. Luckily for him and bondholders, his Peronist opponents are stuck in reverse.
The libertarian firebrand, in office since December 2023, achieved global celebrity as his shock therapy whipped near-hyper-inflation and doubled currency reserves in the world's most-defaulting nation. But he has largely squandered a political boost he got from successful 2025 midterm elections.
At home, Milei's drawn-out defense of cabinet chief Manuel Adorni against corruption allegations left vital structural reforms of taxation and pensions to languish. "The Adorni scandal consumed way too much oxygen," says Bruno Binetti, a fellow at Chatham House. Adorni stepped down in late June.
Abroad, Milei's administration whiffed on a chance to re-enter bond markets before the summer surge in global yields. "If they didn't want to issue at 9%, they won't come to market now at 11%," says Jeff Grills, head of emerging markets debt at Aegon Asset Management.
That has left the economy to drift in the wrong direction for most of Argentina's 46 million citizens. Inflation is stuck around a still-punishing $30\%$ annual rate. Poverty is increasing again after a sharp contraction in Milei's first two years.
This year's $2\%$ to $3\%$ economic growth is concentrated where jobs aren't, in oil and mining exploration and agriculture. "Real wages are stagnant, and unemployment is rising," summarizes Thierry Larose, portfolio manager for emerging markets local debt at Vontobel Asset Management.
Milei's poll numbers have dropped accordingly, with voters disapproving of his stewardship by a 60-to-40 margin, according to pollster AtlasIntel. So have bond prices. Benchmark paper maturing in 2038 fell from 83 cents on the dollar to
Argentines may well see the alternative as worse when they cast ballots in October 2027, though. Peronism's leading lights, former President Cristina Kirchner and Buenos Aires Province Gov. Axel Kicillof, have feuded with each other and rehashed the disastrous policy prescriptions that ushered Milei into power. "The Peronists are very nostalgic about a golden age that disappeared more than 15 years ago," says Binetti.
“With the information we have today, continuity is more likely than change” next year, says Alejo Czerwonko, chief investment officer for emerging markets at UBS Global Wealth Management. On that assumption, Argentine bonds are a buy. “They are trading at a steep premium over other B-rated credits despite one of healthiest fiscal situations on the planet,” argues Czerwonko.
Aegon's Grills is a tad more cautious, seeing Argentine credit as “not too far from an entry point.” Yields are near, if not at the top of, the emerging market charts, paying a percentage point more than neighboring Ecuador and nearly as much as Gabon, he notes. Vontobel's Larose considers “the outlook for Argentine bonds as challenging but potentially attractive.”
Stagnation might get incumbents thrown out in other countries. In Argentina, it's something of an achievement compared with past chaos and contraction. "Milei is delivering a modicum of stability in the ultimate boom-and-bust economy," Czerwonko says.
Milei has powerful friends to buttress that stability if necessary, at the International Monetary Fund and the U.S. Treasury, which opened a \$20 billion credit line to Buenos Aires to fortify the peso before last year's midterms.
Milei's reforms could still fail, like those of Mauricio Macri before him. But investors may be getting paid adequately for that risk. B
If the 10-year U.S. Treasury yield remains above 5%, millions of people who rely on stock-generated income to pay their living expenses could grow worried. But fret not—the options market offers a way out.
The effects are already being felt. The ProShares S&P 500 Dividend Aristocrats exchange-traded fund (ticker: NOBL) is down about 3.6% since the 10-year Treasury closed above 5% on Sept. 15 for the first time since 2007. The State Street Utilities Sector SPDR ETF (XLU), also favored by dividend seekers, has also lost 3.6% over the same period.
A deeper decline in the stocks is possible if the Federal Reserve increases interest rates again, as is expected. Higher bond yields could alarm retirees with low thresholds for market volatility and an overreliance on dividends. Dividend stocks are highly sensitive to interest rates because they compete with bonds. When bond returns increase, dividend stocks tend to decline, as their payouts look less attractive.
Dividends might remain stable, but investors could panic when they see the value of their portfolio fall—and companies could cut dividends, or limit increases, as a rising-rate environment increases debt expenses.
The utility sector, for its part, has attracted enormous trading interest—and it doesn't seem to bode well. Bearish short selling on the Utilities ETF was the most active in about six years, per Goldman Sachs data, even as upside call option buying was recently at the highest levels in a year. While some traders point to the call activity as a bet on an XLU rebound, or a short squeeze, our read is that investors short XLU bought calls—which increase in value when stock prices rise—as a hedge.
Too few Americans have enough saved for retirement. They have been forced to own more stocks than recommended for their age to maintain their standard of living. They have high portfolio risk at a stage of life that historically was defined by conservative, bond-heavy portfolios.
If yields keep rising, bonds will become competitive with stocks and millions of retirees could see something that is a rarity in the past 30 years: the failure of stock prices to snap back after a decline in value. Many will likely sell equities if they can finally get higher, and safer, bond returns.
Two strategies are relevant.
Aggressive investors can wager against the Dividend Aristocrat ETF, which, at \$54.30, is below its 20-day simple moving average of \$55.61—a fact that attracts bearish traders like sharks to chum.
With the ETF at current levels, buy the November \$54 put to profit from a decline. The trade costs about 95 cents, but trading volumes are light. At \$50, the put is worth \$4, and the value will continue to increase if the fund tumbles.
Dividend-reliant investors, for their part, can buttress their positions by selling calls on stocks or ETFs, which creates what we call “conditional dividends” that often exceed common stock dividends.
With the State Street Utilities ETF at \$39.83, the December \$42 call could be sold for about 67 cents. If the fund is below \$42 at expiration, the call premium is kept. XLU yields about 3%, and it pays an annual dividend of \$1.21. The strategy risk is if XLU exceeds the strike price, requiring investors to buy the call at a loss, or to adjust it to avoid assignment.
Options income is taxed at personal income rates when generated by a short-term options strategy. Qualified dividend income is taxed at an attractive 15% rate. In addition, selling a call obligates an investor to sell stock if the stock price exceeds the strike price. To avoid that, the call can be adjusted, or rolled, to another expiration.
A proactive approach is smart since dividend stock tremors could worsen, prompting more investors to seek the relative safety of bonds over the risks of stocks. B
If yields keep rising, retirees could see something that's been a rarity in the past 30 years: the failure of stocks to snap higher after a decline in value.
Equity Options
Skew indicates whether the options market expects a stock-market advance or decline. It measures the difference between the implied volatility of puts and calls that are 10% out of the money and expire in three months. Higher readings are bearish.
Meta Platforms executives including CEO Mark Zuckerberg sold over \$50 million of company stock in recent weeks as buzz erupted around the company's Muse AI agent.
On Sept. 24, two entities controlled by Zuckerberg executed a series of stock conversions and multimillion-dollar share sales. First, CZI Holdings, a private wealth holding vehicle, converted 17,140 Class B shares into publicly traded Class A common stock on a one-for-one basis.
That same day, Zuckerberg sold 27,474 total shares for over \$21.3 million. The sales were conducted indirectly through CZI Holdings as well as the Chan Zuckerberg Biohub, a nonprofit research organization. Both entities were co-founded by Zuckerberg and his wife, Priscilla Chan,
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GameStop's Cohen Makes His Third Buy In Less Than a Month
GameStop's Cohen Makes His Third Buy In Less Than a Month
GameStop CEO Ryan Cohen's multimillion-dollar stock buying spree shows no signs of slowing down.
and are tied to their broader philanthropic organization, the Chan Zuckerberg Initiative.
A separate filing shows that Chief Operating Officer Javier Olivan sold 1,575 shares for roughly \$1.2 million on Sept. 28. Most of the shares were sold directly, with the remainder sold indirectly through limited liability companies and a family trust. Olivan executed the sales under a trading plan he adopted on Nov. 17, 2025.
The transaction marked Cohen's third major stock purchase since the start of September. Cohen acquired \$20.4 million in company shares on
A filing with the Securities and Exchange Commission shows that Cohen purchased 450,000 shares for nearly \$10.6 million on Sept. 29, bringing his direct holdings to just over 40.9 million shares. That stake represents roughly $8\%$ of GameStop's shares outstanding.
The transactions were executed under a prearranged trading plan that Zuckerberg adopted on Jan. 31, marking his first stock sales since August 2025, according to filings with the Securities and Exchange Commission.
Chief Product Officer Christopher Cox made an even bigger sale, disposing of 40,000 shares for \$28.5 million on Sept. 21. The sales were made indirectly through a revocable trust in his name.
Sept. 10, followed by an additional \$26.3 million on Sept. 21.
While the CEO and GameStop have remained tight-lipped about the thinking behind his recent purchases, Cohen remarked earlier this year that it was “essential” for chief executives of public companies to buy stock “in order to further strengthen alignment with stockholders.”
Now in his third year at the helm, Cohen has driven aggressive cost-cutting and turnaround efforts to nudge the firm toward profitability.
Cohen began acquiring GameStop stock in late 2020, and his purchases have consistently provided a boost to the shares, which trade heavily on sentiment and hype. Following his buys, the stock has gained an average of 7% in the following trading session, according to Dow Jones Market Data. B
Conifer Management raised its stake in the automotive retailer to 1,840,698 shares. Conifer Management did so through the purchase of 478,058 Group 1 Automotive shares from Sept. 9 through Sept. 29 at per share prices ranging from \$235.11 to \$286.58. On Sept. 21, Conifer entered into a stockholder agreement with the company, pursuant to which Group 1 Automotive agreed to expand its board to 11 members and appoint Conifer analyst Benjamin Hart as a director effective on Nov. 1, and Conifer agreed to a standstill capping its ownership at 19%. Following the latest purchases, Conifer owns a 15.4% stake in Group 1 Automotive's outstanding stock. Shares of Group 1 Automotive have lost roughly 39.2% of their value in 2026.
Led by CEO Mark Zuckerberg, Meta executives sold more than \$50 million worth of company stock following the release of Meta's Muse AI Agent.
Frazier Life Sciences Management raised its stake in the cholesterol-focused biopharmaceutical company to 18,938,902 shares. Frazier Life Sciences did so through the purchase of 850,000 NewAmsterdam Pharma shares from Sept. 8 through Sept. 18 at per share prices ranging from \$21.08 to \$25.50. Following the latest purchases, Frazier owns a 15.8% stake in NewAmsterdam Pharma's outstanding stock. Shares of NewAmsterdam Pharma have lost roughly 29.5% of their value in 2026.
Gamco Investors raised its stake in the floor cleaning equipment maker to 1,022,610 shares. Gamco Investors did so through the purchase of 97,920 Tennant shares from July 29 through Sept. 21 at per share prices ranging from \$66.22 to \$84.93, and slightly offset those purchases through the sale of 850 shares from July 24 through Aug. 27 at \$70.45 to \$87.30. Following the latest purchases, Gamco Investors owns a 6% stake in Tennant's outstanding stock. Shares of Tennant have lost about 9.2% of their value in 2026.
Spruce House Investment Management raised its stake in the real estate services company to 3,282,012 shares. Spruce House did so through the purchase of 489,675 Colliers shares from Sept. 23 through Sept. 28 at per share prices ranging from \$89.68 to \$92.16. Following the latest purchases, Spruce House owns a 6.6% stake in Colliers' outstanding stock. Shares of Colliers International have lost about 38.4% of their value in 2026.
ISQ Global Fund II lowered its stake in the midstream energy services company to 17,618,164 shares. ISQ Global did so through the sale of 480,621 Kinetik Holdings shares from Aug. 20 through Sept. 21 at per share prices ranging from \$53.50 to \$56.45. Following the latest sales, ISQ Global continues to own an 18.4% stake in Kinetik Holdings' outstanding stock. Shares of Kinetik Holdings have gained roughly 40.4% in value in 2026.
Oct. 2: While many are focusing on the headline metrics—nonfarm job growth, average hourly earnings, the unemployment rate—and assessing what they are saying about the labor market or the broader economy or what they might mean for the FOMC, we'll offer two numbers—53.1% and 60,167—that we think speak volumes.
First, the initial collection rate for the September establishment survey was a ridiculously low 53.1%, which right off the bat renders the initial September estimates of nonfarm employment, hours, and earnings highly suspect. Second, and more importantly, at least if you set aside the low September collection rate, over the 12 months ended in September, the not seasonally adjusted data show private sector payrolls increased by an average of 60,167 jobs per month, or right in line with the trend rate that has prevailed since early 2025. This is, to us, the most relevant data point we can pull from the September employment report; while the estimates of monthly job growth on a seasonally adjusted basis have been all over the map, the underlying trend rate of job growth in the not seasonally adjusted data has been notably stable.
Moreover, though well lower than what we were all accustomed to over the years prior to the pandemic, the current trend rate of job growth is more than adequate to hold the unemployment rate in check, given what is, month to month swings notwithstanding, much weaker labor supply growth. This has been, and remains, our focus.
Oct. 1: The four-year presidential cycle has historically been a useful guide for understanding market trends. Since World War
To be considered for this section, material, with the author's name and address, should be sent to MarketWatch@barrons.com.
II, the pre-election year (2027) has been the strongest of the four years, on average. In fact, the S&P 500, including dividends, hasn't experienced a negative pre-election year since the 1930s. Many market historians attribute this strength to policymakers' tendency to support economic growth heading into an election year through fiscal and monetary policies that encourage favorable economic conditions.
This year, the midterm election year, has historically been more volatile. It is often associated with larger-than-average market corrections that tend to reach their lows during the September to October time frame. While these periods can be uncomfortable for investors, history suggests they have often created attractive opportunities. Since 1950, the 12 months following a midterm election have produced an average return of 16.6% for the S&P 500, with no negative 12-month periods following the election.
While market volatility often creates uncertainty during midterm election years, history suggests that some of the best gains may lie ahead. When the four-year presidential cycle is analyzed quarter by quarter, the next three quarters emerge as the strongest period of the cycle. On average, the S&P 500 has gained 20.2% during the nine months from Oct. 1 of the midterm election year through June 30 of the following pre-election year.
Oct. 1: Capital spending booms rarely end well for investors. Investing vast sums quickly tends to produce a major decline in returns on capital. And share prices of companies undertaking massive capital expenditure often peak well before their investment outlays do.
Data centers being commissioned today will likely become outdated (and uncompetitive) within a few years as technology improves and low-marginal-cost competitors emerge. This would push hyperscalers' return on equity far below what their current valuations imply.
Given the steep cost of data-center build-outs and technology, providers of compute today are unlikely to hit their profitability
"Since World War II, the pre-election year (2027) has been the strongest of the four years [of the presidential cycle], on average. The S&P 500, including dividends, hasn't experienced a negative pre-election year since the 1930s." –Bryan, Michael, and Ronald Sadoff, Wealth Enhancement
"Since World War II, the pre-election year (2027) has been the strongest of the four years [of the presidential cycle], on average. The S&P 500, including dividends, hasn't experienced a negative pre-election year since the 1930s." –Bryan, Michael, and Ronald Sadoff, Wealth Enhancement
targets. Demand for compute is contingent on token prices. If token prices plummet, demand for compute would rise substantially, but eat into model providers' revenue. However, if token prices don't drop considerably, demand for compute would be underwhelming....
For the AI trade, the canary in the coal mine will be the companies investing heavily in data centers. If their stock prices drop or corporate spreads widen materially, they will face pressure to cut back projected investment. This will weigh on the share prices of their suppliers (semiconductor producers, industrial companies, etc.).
Expectations for U.S. profit growth and AI spending are unrealistic and will correct sooner than most anticipate.
Sept. 30: Credit spreads are the difference in yields between two bonds with the same (or similar) maturities but different credit qualities—for instance, the difference between the yield on a 10-year Treasury and the yield on a 10-year corporate bond, or an index of corporate bonds with a maturity around 10 years. When credit spreads widen, especially in times of low rates, it means the bond market could be pricing in a greater chance of an economic slowdown. However, in times of elevated yields, credit spreads can tell us if bond markets are getting concerned about corporate profits.
We should become more worried about this bull market if the rise in Treasury yields is accompanied by a widening of credit spreads. Positively, that isn't happening now. We watch the Moody's Baa/10-year Treasury yield credit spread, which compares the yield on 10-year debt between the higher end of the "junk" bond complex to the 10-year Treasury yield. Anything above $2.0\%$ is a warning shot, and above that is a potential problem. However, since Aug. 14, around when the 10-year yield really began to accelerate, credit spreads have declined sharply. and recently hit a one-year low of $1.39\%$ . That tells us the rise in Treasury yields isn't being accompanied by increased concern for economic growth or corporate health, and that's a good thing. —Tom Essaye
The panic/euphoria model is a gauge of investor sentiment. It identifies "Panic" and "Euphoria" levels which are statistically driven buy and sell signals for the broader market. Historically, a reading below panic supports a better than 95% likelihood that stock prices will be higher one year later, while euphoria levels generate a better than 80% probability of stock prices being lower one year later.
Source: Citigroup Investment Research - US Equity Strategy
DATA
Statistics from Sept 28 - Oct 2, 2026 | Barron's 50-Stock Average | 51 | Cash Track | 47 | Coming Earnings | 51 | Conference Call Calendar | 51 | Consensus Estimate | 51 | Delta Tactical Sentiment | 51 | Distributions & Offerings | 53 | Dividend Boosts - Reductions | 52 | Dividend Ex-Payment Dates | 52 | DJ Averages | 49 | DJ U.S. Total Market Industry Groups | 51 | Dow Jones Averages | 49 | Dow Jones Per Share Values | 50 | Exchange Traded Portfolios | 46 | Federal Reserve Data Bank | 52 | Foreign Exchange | 51 | Gold & Silver Prices | 52 | Gold Mining Index | 52 | Indexes P/Es & Yields | 50 | Initial Public Offerings | 50 | Investor Sentiment Readings | 50 | Key Foreign Market Indexes | 45 | Market Lab | 49 | Money Rates, U.S. & Foreign | 51 | Mutual Funds | 47 | N.Y. Stock Exchange | 37 | Nasdaq National Market | 41 | New Corporate Listings | 50 | New Highs & Lows | 53 | NYSE Half-Hourly Volume | 50 | Other Market Indexes | 49 | Pulse of the Economy | 51 | Stock Splits - Special Dividends | 52 | Stock Volume | 50 | Trading Diary | 49 | Vital Signs | 30 | Week In Stocks | 50 | Weekly Bond Statistics | 52 | Winners & Losers Stocks | 35 | Contact Us
For queries, email us at editors@barrons.com
NEW YORK STOCK EXCHANGE COMPOSITE LIST - NEW HIGHS - NEW LOWS |
-52-Week- |
Tick | Div | High | Low | Name | Sym | Yld | P/E | Last | Chg. | Amt. |
Why Is It So Hard: NYSE Composite breadth fell for a seventh week as the S&P 500 dipped 0.3% as gains in tech stocks helped offset weakness elsewhere. Losing stocks outpaced winners by nearly 2 to 1.
In generating this chart, we subtract each day's NYSE composite declines from that day's advances. The resultant total is added to the next day's total, and so on. When all five days' numbers are added together, this produces the weekly figure we plot. Dec. 31, 1985 =1000. |
Chip Power: The Nasdaq Composite Index closed Friday at 27,191, up 0.5% for the week and just shy of its 27,244 record on Sept. 22. Nvidia neared it record close. Micron reported a stunning gross margin of 87%.
BlackRock Funds A: | AdvLgCapCore | 25.39 | -0.08 | 18.2 | 99.0 | CapAppr | 32.65 | 0.28 | 16.6 | 98.4 | EqtyDivd | 21.89 | -0.30 | 13.6 | 67.7 | GlblAlloc | 20.44 | -0.05 | 7.6 | 54.6 | HlthScOp | 63.24 | -1.77 | 8.1 | 38.2 | MultiAstIncome | 10.36 | -0.08 | 2.6 | 33.3 | NatIMuni | 9.46 | 0.03 | -2.8 | 7.8 | ScTechOppA | 88.55 | 2.00 | 41.2 | 163.9 | The listings include the top 1250 open-end funds by assets. These funds value their portfolios daily and report net asset values (the dollar amount of their holdings divided by the number of shares outstanding) to the National Association of Securities Dealers. Total returns reflect both price changes and dividends; these figures assume that all distributions are reinvested in the fund. Because Lipper is constantly updating its database, these returns may differ from those previously published or calculated by others. 3 year returns are cumulative. The NAV is the last reported closing price for the week. Footnotes: NA: not available. NE: performance excluded by Lipper editor. NN: fund not tracked. NS: fund not in existence for whole period. e: ex capital gains distributions. f: previous day's quote. n: no front- or back-end sales charge. p: fund assets are used to pay marketing and distribution costs (12b-1 fees). r: fund levies redemption fee or back-end load. s: stock dividend or split of 25% or more. t: fund charges 12b-1 fees (for marketing and distribution) and a back-end load. v: capital-gains distribution may be a return of capital. x: ex cash dividend. | NAV | Net Chg. | YTD % Ret. | 3-Yr. % Ret. | NwWrldA | 107.14 | -1.23 | 14.9 | 71.6 | SmCpA | 82.22 | 0.30 | 12.2 | 49.8 | STBFA | 9.36 | 0.00 | -0.1 | 12.2 | TxExA | 11.81 | 0.00 | -3.2 | 10.7 | WshA | 66.22 | -0.67 | 6.5 | 65.9 |
AMG Managers Funds: |
YachtmanFocFd I24.08 | NA | NA | NA | YacktFocFd N n | 24.19 | NA | NA | NA | YacktmanFd I | 26.47 | NA | NA | NA |
Angel Oak Funds Trst: | AglOkMtiStFdClIn | 8.52 | NA | NA | NA |
AQR Funds: | DAFR6 | 13.30 | NA | NA | NA | DivStr I | 15.53 | NA | NA | NA | EqMktNeut R6 | 12.34 | NA | NA | NA | LngShrtEq I | 22.57 | NA | NA | NA | MgdFutStrI | 11.34 | NA | NA | NA | Multi-Asset R6 | 13.28 | NA | NA | NA | StylePremAlt R | 11.14 | NA | NA | NA |
Take the Money: More cash came back to stock funds, narrowing their trailing month's average weekly outflow to \$570 million. Money-market funds saw their outflows surge to \$23.9 billion, on average. Taxable-bond fund cash inflows grew slightly, to average \$5.1 billion a week, while muni-bond funds had widening outflows, averaging \$400 million.
Equity Funds
Municipal Bond Funds
A red chart indicates a lower value than the starting period. Green means it's higher than the starting period. The charts above show four-week moving averages of net cash flow in millions of dollars.
Metropolitan West: | TotRetBd | 8.66 | NA | NA | NA | TotRetBdl | 8.66 | NA | NA | NA | TRBdPlan | 8.12 | NA | NA | NA | UnconstrBdl | 10.10 | NA | NA | NA |
Nicholas Group: | Nich n | 95.84 | 0.22 | 8.3 | 49.5 |
Northern Funds: | Bdldx n | 8.81 | NA | NA | NA | EmMktsEqldx nr | 17.96 | NA | NA | NA | HiYFxInc n | 5.84 | NA | NA | NA | IntlEqldx nr | 19.18 | NA | NA | NA | MidCpldx n | 23.32 | 0.14 | 12.1 | 55.1 | SmCapIdx n | 17.82 | -0.02 | 15.2 | 67.9 | StkIdx n | 76.88 | -0.19 | 13.8 | 87.0 |
Victory Funds: | EstVall | 48.78 | NA | NA | NA | SmCoOppl | 51.14 | NA | NA | NA |
Victory Port: | RS Global Fd Y | 31.66 | NA | NA | NA | Market Neutral I | 9.28 | NA | NA | NA | SSfnd | 51.04 | NA | NA | NA | VsycamoreFnd | 48.81 | NA | NA | NA |
Victory Portfolios I: | 500Indx Reward n | 93.01 | NA | NA | NA | CrnstModAggr n | 29.68 | NA | NA | NA | Gr&Inc n | 28.45 | NA | NA | NA | Grwth n | 42.71 | NA | NA | NA | Inco n | 11.14 | NA | NA | NA | IncStk n | 21.05 | NA | NA | NA | Intl n | 34.03 | NA | NA | NA | IntmTerm n | 11.87 | NA | NA | NA | Nasdaq100 n | 73.18 | NA | NA | NA | S&PIdx n | 92.93 | NA | NA | NA | SciTech n | 41.69 | NA | NA | NA | TarRet2040 n | 15.84 | NA | NA | NA | VicAggFnd n | 82.18 | NA | NA | NA | SustWld n | 35.65 | NA | NA | NA | CorePlus INSTL | 8.77 | NA | NA | NA | Income Fund INST | 11.14 | NA | NA | NA | Short-Term INSTL | 8.98 | NA | NA | NA |
Note: Theoretical highs and lows are shown. A red chart indicates a lower price than the starting period. Green means it's higher than the starting period.
Green Machine: The rise in long-term Treasury yields to multidecade highs gave a lift to the dollar. Inflation, economic growth, and concern about budget deficits all played a role. Measuring the dollar against six currencies, the ICE U.S. Dollar Index climbed 0.92%.
Coming U.S. Auctions | <td rowspan="2">Monday | <td rowspan="2"> | <td colspan="2">Yields (%) | When Issued* | Last Auction | $95.0 bil | 3-month | 4.069 | 4.110 | $82.0 bil | 6-month | 4.269 | 4.285 | Tuesday | $58.0 bil | 3-year | 4.906 | 4.474 | <td colspan="4">* As of Friday afternoon. | SEC Form 144 must be filed by holders of restricted securities (also called letter stock) who intend to sell shares. Shares Indicated: the number to be sold. Sales Date: the approximate date of the sale. (Sometimes shares aren't sold, even though their owner has filed a Form144.) Source: LSEG Data and Analytics | Company | Sym | Shares Indicated | $ Value | Sale Date | Seller | Title | Kodiak Ai | KDK | 3,250,000 | 9,035,000 | 9/25/26 | Wendel, Andreas | AF | Sinclair | SBGI | 298,808 | 3,845,659 | 9/24/26 | Smith, Frederick | D | Coreweave | CRWV | 200,000 | 17,014,000 | 9/29/26 | Intrator, Michael | H | Roivant Sciences Ltd | ROIV | 200,000 | 7,323,556 | 9/30/26 | Venker, Eric | O | Coca-Cola | KO | 184,117 | 16,167,314 | 9/28/26 | Mann, Jennifer | O | Atlanta Braves | BATRK | 175,395 | 9,460,806 | 9/30/26 | Schiller, Derek | O | Pagerduty | PD | 172,500 | 2,578,875 | 9/30/26 | Tejada, Jennifer | OD | Alto Neuroscience | ANRO | 134,886 | 3,596,061 | 9/29/26 | Smith, Nicholas | O | Cerebras Systems | CBRS | 120,000 | 24,769,200 | 9/25/26 | Lie, Sean | O | Vornado Realty Trust | VNO | 90,000 | 3,074,400 | 9/25/26 | Chera, Haim | O | ---
Yields (%) | When Issued* | Last Auction | $95.0 bil | 3-month | 4.069 | 4.110 | $82.0 bil | 6-month | 4.269 | 4.285 | Tuesday | $58.0 bil | 3-year | 4.906 | 4.474 |
* As of Friday afternoon. | SEC Form 144 must be filed by holders of restricted securities (also called letter stock) who intend to sell shares. Shares Indicated: the number to be sold. Sales Date: the approximate date of the sale. (Sometimes shares aren't sold, even though their owner has filed a Form144.) Source: LSEG Data and Analytics | Company | Sym | Shares Indicated | $ Value | Sale Date | Seller | Title | Kodiak Ai | KDK | 3,250,000 | 9,035,000 | 9/25/26 | Wendel, Andreas | AF | Sinclair | SBGI | 298,808 | 3,845,659 | 9/24/26 | Smith, Frederick | D | Coreweave | CRWV | 200,000 | 17,014,000 | 9/29/26 | Intrator, Michael | H | Roivant Sciences Ltd | ROIV | 200,000 | 7,323,556 | 9/30/26 | Venker, Eric | O | Coca-Cola | KO | 184,117 | 16,167,314 | 9/28/26 | Mann, Jennifer | O | Atlanta Braves | BATRK | 175,395 | 9,460,806 | 9/30/26 | Schiller, Derek | O | Pagerduty | PD | 172,500 | 2,578,875 | 9/30/26 | Tejada, Jennifer | OD | Alto Neuroscience | ANRO | 134,886 | 3,596,061 | 9/29/26 | Smith, Nicholas | O | Cerebras Systems | CBRS | 120,000 | 24,769,200 | 9/25/26 | Lie, Sean | O | Vornado Realty Trust | VNO | 90,000 | 3,074,400 | 9/25/26 | Chera, Haim | O | ---
The Arms index, also known as the short term trading index, is a number derived by dividing one quotient into another quotient. The numerator in the index is the number of advancing stocks divided by the number of declining stocks. As of 3/14/11, the denominator in the index is now the composite volume of advancing stocks divided by the composite volume of declining stocks.
40.6% | Electric power, (mil. kw hrs) (EEI) | Sept 26 | 83,811 | 92,280 | 84,530 | -0.85 | Petroleum, related capacity, % | Sept 25 | 92.5 | 94.0 | 91.4 | 1.20 | Rotary rigs running, U.S. & Can., (Hughes) | Oct 2 | 814 | 807 | 739 | 10.15 | Steel, (thous. tons) | Sept 26 | 1,845 | 1,785 | 1,770 | 4.24 | Steel, rated capacity, % (AISI) | Sept 26 | 80.5 | 77.9 | 78.1 | 3.07 | The Delta MSI measures the position of a representative set of stocks relative to an intermediate-term moving average crossover (MAC) point. When greater than 50% of the stocks are above this MAC point, the market is bullish. When the indicator is below 50%, the market is bearish and risk is elevated. Manager uses discretion on asset allocation when MSI is at 50% +/- 3%. |
Consumption and Distribution | Consumer spending, (bil. $) | Aug | 22,308.5 | r22,117.7 | 21,029.5 | 6.08 | Factory shipments, (bil. $) | Aug | 658.62 | r658.65 | 606.85 | 8.53 | Instinet Research Redbook Avg. (monthly %) | Sept 26 | -0.42 | 0.53 | 0.76 | .... | Baltic Dry Index | Oct 2 | 3,148 | 3,426 | 1,901 | 65.60 | Personal consumption, (bil. $) | 2nd Qtr | 16,788.7 | r16,634.2 | 16,378.3 | 2.51 | Pulse of the Economy |
Special Drawing Rights (SDR) are based on exchange rates for the U.S., British, and Japanese currencies. Source: International Monetary Fund. a-Russian Central Bank rate. b-government rate. d-rebased as of Jan. 1, 2005. y-floating rate.
Readings in the CBOE equity put-call ratio of 60:100 and in the S&P 100 of 125:100 are considered bullish, for instance. Bearish signals flash when the equity put-call level reaches the vicinity of 30:100 and the index ratio hits 75:100.
Coming Earnings | Consensus Estimate | Year ago |
T | Constellation Brands (Q2) | $3.55 | $3.63 |
W | Levi Strauss (Q3) | 0.36 | 0.34 |
TH | Pepsico (Q3) | 2.30 | 2.29 |
F | Delta Air Lines (Q3) | 1.94 | 1.71 | Consensus Estimate
Day | Consensus Est | Last Period | T | August Trade Balance | -$95.0 bil | -$88.6 bil | W | August Consumer Credit | $15.6 bil | $18.1 bil | F | October Michigan Sentiment | 48.0 | 48.1 | Money Rates
Unless otherwise indicated, times are Eastern. a-Advanced; f-Final; p-Preliminary; r-Revised Source: FactSet | Latest Week | Prev. Week | Yr Ago | Discount Rate (NY) | 4.00 | 4.00 | 4.25 | Prime Rate (base) | 7.00 | 7.00 | 7.25 | For more information about coming economic reports - and what they mean - go to Barron's free Economic Calendar at www.barrons.com
Conference Call Calendar | Company | Date | Time | Earnings-Related Period | Delta Air Lines | October 9 | 10:00AM | Q3 |
Tarnished: With bonds yields rising, gold prices fell 3.6%, to \$4,134 an ounce.
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Weekly Bond Statistics | New Offerings, (mil $) (v) | Last Week | Prev. Week | Yr Ago | Corporate (z) | 11,115 | r42,437 | 12,925 | Municipal (z) | 4,971 | r11,225 | 9,704 | <td colspan="4">(Barron's index of 10 high-grade corporate bonds.) | 5.44 | 5.33 | 4.27 | <td colspan="3">(Barron's index of 10 medium-grade corporate bonds.) | 6.09 | 5.95 | (High-grade index divided by intermediate-grade index; decline in latter vs. former generally indicates rising confidence, pointing to higher stocks.)
Weekly Bond Statistics | New Offerings, (mil $) (v) | Last Week | Prev. Week | Yr Ago | Corporate (z) | 11,115 | r42,437 | 12,925 | Municipal (z) | 4,971 | r11,225 | 9,704 |
(Barron's index of 10 high-grade corporate bonds.) | 5.44 | 5.33 | 4.27 |
(Barron's index of 10 medium-grade corporate bonds.) | 6.09 | 5.95 | (High-grade index divided by intermediate-grade index; decline in latter vs. former generally indicates rising confidence, pointing to higher stocks.)
Other Confidence Indicators:
Bloomberg Barclays US Long Treasury\*
Bloomberg Barclays US Credit
(This index includes all publicly issued, fixed-rate, non-convertible, investment-grade, dollar-denominated, SEC-registered corporate debt.) |
(Index of yields of 20 general obligation municipal bonds.) | 5.21 | 5.13 | (Index of 40 actively-traded tax-exempt bonds; component issues are changed regularly to keep the index a current picture of the market. Source: The Bond Buyer
(Difference between yield on highest-grade corporate bonds and yield on stocks on the DJIA.) -3.93 -3.84 -2.69 |
Yield on DJ Equal Weight US Corp Bond Idx: | Corp Bonds, (y) | 6.28 | 6.21 | 4.92 | ---
This table lists the earnings of the Dow Jones Industrial Average component stocks based upon generally accepted accounting principles. Earnings include discontinued and nonrecurring items but exclude extraordinary items and accounting changes as reported by the company and adjusted by the Dow Divisor in effect at quarter-end. The total dividends of the component stocks are based upon the record date and adjusted by the Dow Divisor in effect at quarter end. The payout ratio is the latest 12-months dividends divided by the latest 12-months earnings. r- Revised to correct Microsofts Q4 earnings released on Jan. 24, 2013. | Year Ended |
The table below lists the total earnings (losses) of the Dow Jones Industrial Average component stocks of record based on generally accepted accounting principles as reported by the company and adjusted by the Dow Divisor in effect at quarter end and the total dividends of the component stocks based on the record date and adjusted by the Dow Divisor in effect at quarter end. N.A.-Not available. r-Revised. | Year |
Quarter Ended | Close Price | Qtrly Earns | 12-Mo. Earns | P/E Ratio | Qtrly Divs. |
2026 | Sept. | 30 | 50906.05 | NA | NA | NA | 194.69 | June | 30 | 52319.20 | 830.32 | 2405.65 | 21.75 | 201.27 | Mar. | 31 | 46341.51 | 546.89 | 2066.71 | 22.42 | 199.32 |
United Community Banks .26 | Graphic Packaging | .11 | H & R Block | .46 | Marcus & Millichap | .25 | Sibanye-Stillwater ADR | .499 | Sibanye-Stillwater ADR | .493 | Wednesday (October 7) | Bruker | .05 | FirstService | .305 | Gentherm | 1.90 | Gentherm | 1.90 | Heartland Express | .02 | Kulicke & Soffa Inds | .205 | News Corp CI A | .10 | News Corp CI B | .10 | Seagate Technology | .74 | Albany International | .28 | Avient | .275 | Designer Brands | .05 | Dole | .085 | Eastman Chemical | .84 | ENI ADR | .628 | Ferguson Enterprises | .89 | HP | .30 | J.Jill | .09 | Merck | .85 | Orion | .021 | Thursday (October 8) | Bank7 | .30 | BayCom | .30 | NXP Semiconductors | 1.014 | Banco Bradesco Ord ADR | .003 | Belden | .05 | Best Buy | .96 | Build-A-Bear Workshop | .23 | Edgewell Personal Care | .15 | Grupo Aval Acciones ADR | .013 | GSK ADR | .452 | Royal Caribbean Group | 1.50 | Salesforce | .44 | SLB | .295 | Taiwan Semiconductor | 1.114 | VICI Properties | .46 | ATN International | .29 | Chicago Atlantic BDC | .34 | GlobalFoundries | .12 | ICF International | .14 | Independent Bank | .64 | Keurig Dr Pepper | .23 | NRC Health | .16 | Steel Dynamics | .53 | Towne Bank | .28 | Virco Manufacturing | .025 | Washington Trust Bancorp | .56 | Altria Group 1.11
Curtiss-Wright .26
Dine Brands Global .19
Flowserve .22
Franklin Templeton .33
Illinois Tool Works 1.72
Intl Flavors & Fragrances .40
Omnicom Group .80
Progressive .10
Quanta Services .11
Ralph Lauren CI A 1.00
Schneider National .10
ServisFirst Bancshares .19
Titan America .04
Tronox Holdings .05
Turning Point Brands .08
---
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Don't Let the Market's Bad Breadth Get to You
The weakening among stocks outside a golden circle of market leaders isn't the bad omen you might think. Indeed, this could be the setup for a year-end rally.
ALEX ROSENBERG
---
FEATURES
10 Stocks to Buy for Quantum Computing's Next Phase MACKENZIE TATANANNI
12 Veeva's AI Tools for Life Sciences Could Boost Its Stock 30% DAN VICTOR
14 How Investors Got Burned by the Broadstreet Private-Equity Fund BILL ALPERT
16 A Sneak Peek Into the Future of AI-Assisted Trading ANDREW WELSCH
26 Q&A: Top Consumer Stocks From Fidelity's Ben Shuleva EVIE LIU
54 Other Voices: What's to Blame for Capitalism's Unpopularity CLIFFORD WINSTON
LEWIS BRAHAM
Funds Quarterly: Have It All With a ‘Core and Explore’ Approach
Rounding out your indexed investments with well-managed focused funds can help protect your portfolio from steep losses and goose your gains. Plus: the quarter’s winners and losers.
COLUMNS
7 ANDY SERWER – UP & DOWN WALL STREET
8 JACK HOUGH – STREETWISE
13 ANDREW BARY – INCOME INVESTING
25 RANDALL W. FORSYTH – THE ECONOMY
28 ADAM LEVINE – TECH TRADER
29 PAUL R. LA MONICA – THE TRADER
32 CRAIG MELLOW – INTERNATIONAL
33 STEVEN M. SEARS – STRIKING PRICE
55 ELIZABETH O'BRIEN – RETIREMENT
DEPARTMENTS
6 INDEX OF COMPANIES
9 REVIEW & PREVIEW
34 INSIDE SCOOP, 13DS
35 WINNERS & LOSERS
36 MARKET VIEW
55 MAILBAG
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INDEX
A Accenture ..... 21
Advantest ..... 31
Airbnb ..... 8
Akamai Technologies ..... 7
Alger Concentrated Equity ..... 23
Alger Focus Equity ..... 23
Alphabet ..... 7,8,9,16,21,30
Amazon.com ..... 8,20,27,30
American Airlines Group ..... 18
Amgen ..... 10
AMG Yacktman Focused ..... 20
Apple ..... 8,30
B Bank of America ..... 18
BitMine Immersion Technologies ..... 30
BlackRock ..... 16
Booking Holdings ..... 8
Breakwave Tanker Shipping ..... 24
Broadcom ..... 23
C Cambria Global Value ..... 23
Cambria Shareholder Yield ..... 23
Campbell's ..... 26
Capital One Financial ..... 23
Carnival ..... 8
Charles Schwab ..... 8,18
Circle Internet Group ..... 30
Cisco Systems ..... 18
Coca-Cola ..... 26
Coinbase Global ..... 30
Colliers International Group ..... 34
Constellation Brands ..... 9,27,29
CoreWeave ..... 7
Corgi Crypto Infrastructure ..... 30
Costco Wholesale ..... 27
D Davis Select US Equity ..... 23
Delta Air Lines ..... 9,29
Diageo ..... 27
D-Wave Quantum ..... 11
E eToro Group ..... 16
ExxonMobil Holdings ..... 23,24
F Fidelity Select Consumr Discrety Portfolio .. 26
Fidelity Select Consumer Staples Portfolio . 26
Fidelity Wise Origin Bitcoin ..... 30
G GameStop ..... 34
General Mills ..... 26
GMO Quality ..... 21
GMO US Quality ..... 21
Grayscale Ethereum Staking ..... 30
Group 1 Automotive ..... 34
H Hut 8 ..... 30
I IBM ..... 10
Infleqtion ..... 11
Interactive Brokers Group ..... 16
Invesco Russell 1000 Equal Weight ..... 21
IonQ ..... 10
iShares 20+ Year Treasury Bond ..... 13,55
iShares Bitcoin Trust ..... 24,30
iShares Core S&P Small-Cap ..... 24
iShares MBS ..... 24
iShares Semiconductor ..... 31
iShares Treasury 20+ Year Treasury Bond .. 13
Our index lists significant companies mentioned in stories and columns, plus Research Reports, and Corrections & Amplifications. The references are to the first page of the item in which the company is mentioned.
K Keurig Dr Pepper....27
Kinetik Holdings....34
Kioxia Holdings....31
Kurv Memory Select....31
L Levi Strauss....29
Lumentum Holdings....23
M Marriott International....27
Marvell Technology....23
Merck....24
J Janus Henderson AAA CLO....55
JetBlue Airways....18
Johnson & Johnson....21,24
JPMorgan Equity Focus....21
For Customer Service, call 1 (800) 544-0422, or go to customercenter.barrons.com. For reprints of articles, call 1 (800) 843-0008, or go to djreprints.com.
Meta Platforms....7,8,18,30,34
Micron Technology....28,29
Microsoft....10,18,21,30
Moderna....24
Mondelez International....27
Morgan Stanley....23
N Netflix....9
NewAmsterdam Pharma....34
New York Times....18
Nvidia....7,10,16,18,21,30
O Onto Innovation....31
Oracle....7
P Paradigm Select....23
Penguin Solutions....31
PepsiCo....9,27,29
PGIM Jennison Focused Value....23
Phillips 66....18
Pimco 15+ Year US TIPS Index....13
Pimco 25+ Year Zero Coupon....13
Pimco 25+ Year Zero Coupn US Treas Indx13
Planet Fitness....8
Procter & Gamble....21
ProShares S&P 500 Dividend Aristocrats...33
Putnam Focused Large Cap Value....23
Q Quantinuum....10
R Rigetti Computing....11
Robinhood Markets....16,30
Roundhill Magnificent Seven....18,30
Roundhill Memory....31
Royal Caribbean Group....8
Russell 1000 Value....23
S Salesforce....12,21
Samsung Electronics....23,28,31
Sandisk....31
Shopify....27
Sirius XM Holdings....8
SK Hynix....28,31
Soulpower Acquisition....14
Space Exploration Technologies....8
State Street Energy Select Sector SPDR...24
State Street Utilities Sector SPDR....33
Strategy....30
T Target....26
Tema Memory....31
Tennant....34
Tesla....30
Total International Stock....16
Total Stock Market....16
Tuttle Capital Concentrated Memory Stack 31
U United States Oil....24
V Valero Energy....18
Vanguard 500 Index....21
Vanguard Long-Term Corporate Bond....13
Vanguard Real Estate....55
Vanguard Total Bond Market....24
Veeva Systems....12
Virtus Reaves Utilities....24
W Walmart....27
Webull....16
Z Z Squared....14
---
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UP & DOWN WALL STREET
The New Math of AI: Are Those Trillion-Dollar Numbers Real?
W
Anthropic's IPO is “completely ludicrous” and “the triumph of Wall Street fees over critical thinking,” says Roger McNamee.
e have offi-
cially en-
tered the era
of trillion-
dollar math
that doesn't
add up.
On Wednesday, the U.S. military pulled up its tents and left Iraq after more than 23 years, 4,418 U.S. deaths, and \$1.7 trillion in spending.
This past week we also learned from Anthropic's long-anticipated initial-public-offering prospectus that the artificial-intelligence colossus is eyeing a \$2 trillion valuation. Add to that a new Brookings paper, which says the AI infrastructure buildout will total \$10.3 trillion from 2025 to 2032.
All mind-blowing numbers. But is any of this worth it? (Especially the thousands lost in Iraq, which puts the rest in perspective.) It would be hard to deny that AI mania has us, Icarus-like, flying too close to the sun.
Nvidia, the poster child of AI exuberance, is up 1,249% since ChatGPT was launched on Nov. 30, 2022—even as AI models have gone rogue countless times. And still, Wall Street is shoveling money into these enterprises. All of which should give us pause.
But it hasn't, evident in light of the recent man-bites-doggery in which President Donald Trump pooh-poohs AI naysayers while AI CEOs practically beg for federal oversight. Mostly what came out of Big Tech's big sit-down at the White House this past week, besides a “morally binding” agreement and the president saying AI is “going to be very, very safe,” was a photo op reminiscent of a Soviet-era
BY ANDY
SERWER
parade reviewing stand, replete with a POTUS-posted seating chart.
A majority of Americans think we need more. In a new poll, over half of those surveyed by The Wall Street Journal want safeguards on AI, and nearly two-thirds want a pause in the development of the technology.
"I'm particularly concerned about [AI companies] pushing the idea that they can regulate themselves," says Geoffrey Hinton, a Nobel laureate in physics who worked at Google parent Alphabet for a decade and has been called the godfather of AI. "Nobody thinks drug companies should be allowed to regulate themselves. The FDA forces them to prove their drugs are safe before their release. At the very least, we should have something like that for AI."
Though a number of dissenters from
AI companies have resigned in protest recently, some from Silicon Valley were wary of tech running amok years earlier, such as Frances Haugen of Facebook parent Meta Platforms, and Tristan Harris, Timnit Gebru, and Hinton of Alphabet.
One of the first and loudest of the technorati to turn techwary was Roger McNamee, co-founder of Silver Lake
and Elevation Partners, who worked closely with venture firm Kleiner Perkins and Meta CEO Mark Zuckerberg. McNamee began biting the hand that fed him a decade ago, warning about social media most pointedly in his book Zucked: Waking Up to the Facebook Catastrophe, published in 2019. True, Meta's stock has risen over $300\%$ since then, but McNamee was calling out societal harm, which he argues hasn't diminished. (McNamee is an executive producer of a new movie about Facebook, The Social Reckoning, in which Bill Burr plays a character loosely based on him.)
McNamee has turned his attention to the business of AI, which he seems to think is a kind of delirium “balanced on the head of a pin”: “The pin is this notion that people are going to deploy AI widely, they’re going to pay a ton of money for it, and that companies are going to get the cost structure down so it generates enough cash flow to service their debt,” he says. “That’s a lot of dependencies."
Anthropic's IPO is “completely ludicrous” and “the triumph of Wall Street fees over critical thinking,” he says. “Remember, there are 10 other companies selling this stuff. A \$1 trillion or \$2 trillion valuation for a company with this revenue is ridiculous.” (Anthropic’s revenue grew 12-fold in 2025 to nearly \$4.6 billion.)
Ah yes, Anthropic's math. Reuters reports that the company a) lost \$42 billion last year, b) expects to spend \$518 billion on cloud computing and infrastructure obligations in coming years, and c) warns that its business could cause “catastrophic or existential risks to humanity.”
Sheesh. Remember when we thought tobacco companies were the bad guys? More to the point, who in their right mind would dip their beak here? Sure, early investors like former Google CEO Eric Schmidt might like you to buy their pre-IPO Anthropic shares—he bought in May 2021 at a \$461 million valuation, according to PitchBook, which, at a \$2 trillion valuation, would give him a dizzying 4,338-fold gain—but why oblige him? As Barron's recently noted, "Anthropic's IPO looks like a risky bet, at best."
What about the AI bubble writ large? “Ordinarily, you’d have expected the government to intercede. Now you’re counting on the bond market,” says McNamee, referring to the deteriorating credit ratings and bond prices of some AI players such as Oracle, Akamai Technologies, and CoreWeave.
Elevation Partners co-founder Roger McNamee in 2021: He was one of the first and loudest of the technorati to turn tech-wary.
“AI itself is not going to go bust,” says Hinton. “It works, just like railways worked. But everybody thought you could get rich quick by investing in railways, and there was a bust. That often happens with new technologies. Will we see a bust? I don’t think it’s impossible. It is a large fraction of the U.S. stock market now. People are piling in.”
To paraphrase Sen. Everett Dirksen's reputed observation: "A trillion here, a trillion there, and pretty soon you're talking real money."
The money here is real. The math, not so much. B
STREETWISE
Barclays Capital estimates that the prize in today's persistent agent turf war could be \$10 trillion in stock market value, or nearly two Nvidias.
How to Pretend To Understand 'Persistent Agents'
Just in time for Halloween, Wall Street has a new hobgoblin. It's called the persistent agent, and on the scariness scale, it falls somewhere between a wet gremlin and a bond vigilante.
By now you have surely heard of Muse, launched on Sept. 8 by Meta Platforms, the company behind Facebook, Instagram, and creepy bionic eyeglasses. Another early contender is privately held Instinct, whose agent is invitation-only for now. This past Tuesday, ChatGPT owner OpenAI launched an agent called Dots. Anthropic has Claude Cowork, and Alphabet has Gemini Spark. Elon Musk's SpaceX has Grok Bot. Apple has, well, not much but maybe enough—we'll come to that.
Musephobia has helped send shares of Planet Fitness and Sirius XM Holdings down 19% and 13%, respectively, since Sept. 7, on fears that agents will make it easy for busy and distracted consumers to cancel forgotten subscriptions. Airbnb and Booking Holdings are down 13% and 17%, respectively, because Muse can chisel down travel costs through tireless robo-shopping. And Charles Schwab is off 11% because the agent might coax customer balances out of checking accounts paying 0.01%.
So far, there have been more stock tricks than treats, but Meta itself is up $18\%$ since Muse's launch. This past week, a Morgan Stanley travel analyst theorized that winners in Muse-assisted travel will be companies with differentiated goods, relatively
BY JACK
HOUGH
limited shopper attention, and high distribution costs. Cruise lines check all three boxes, and, coincidentally or not, Royal Caribbean Group and Carnival are lately running slightly ahead of the market.
Two new reports are more jarring. One from BofA Securities explores whether Muse is a threat to Apple. Unlikely, it concludes, but the question is more telling than the answer. Why would a month-old app pose problems for a hardware company with 2.5 billion installed devices worldwide? Barclays Capital, meanwhile, wins on financial audacity. It estimates that the prize in today's persistent agent turf war could be \$10 trillion in stock market value. That's nearly two Nvidias.
When the stakes are that high, the fear is rampant, and the technical details are complicated enough to make a cyborg cry in binary, it's time for another installment of my semiregular How to Pretend to Understand series. Past topics have included Brexit and quantum computing. The idea is to quickly arm the layperson with just
enough background on a topic to survive an office conversation about it, lord a couple of facts over less-informed friends, and maybe form some educated investing guesses.
Personable as your favorite chatbot might seem, it doesn't really chat. It converts questions into numbers representing words or word fragments (tokens), then uses a probability engine to determine the next best number to add, again and again, until it finishes its “response” and converts its added numbers back into words. A persistent agent, on the other hand, doesn't simply ask itself which token comes next in the answer, but rather which tool it should use or sub-task it should perform to get closer to an assigned goal.
The “persistent” part means that these agents can keep working even after you’ve logged off and learn about you as they go, like a human assistant. For that, they need their own computing sandbox. Pioneer OpenClaw, launched late last year, can run locally on user machines. Muse uses a virtual machine, or pretend computer made from software running on an actual computer, like a tiny apartment inside a massive building. Agents also use “headless” tools, meaning they can browse websites, fill out forms, place orders, send messages, and even make synthesized voice calls entirely in code, without any of the windows or graphical front ends that humans need to make sense of the internet.
Two other important concepts to consider are connectors and payment rails. Connectors are things like email, calendars, account logins, and other sources of personal information. The more you tell an agent about yourself, the more it can do to (hopefully) help. A Barron's colleague used Muse to find cheap pants and book a toenail-related doctor's appointment, but only by providing his credit-card statement did he find and kill a forgotten subscription. Payment rails allow agents to execute transactions. Muse uses a third-party payment company called Stripe, for customers who've made peace with Mark Zuckerberg snooping through their social media but aren't ready to hand him their credit cards.
Trust is a big deal here. Apple has plenty of it, because it makes money by charging dearly for its wares, not sell-
ing customer information. It has its own payment rail, Apple Pay, but Siri isn't a persistent agent, or even much of a chatbot. Apple's artificial-intelligence trump card was supposed to be that tasks would increasingly run on local or "edge" devices like iPhones, but it's unclear how equipped today's phones are for staying up all night to perform a persistent agent's duties.
Meta has less trust. But it has an early-mover advantage, and an excellent handle on how and where to get paid on services that don't have customer fees. That's important, too: Barclays reckons the cost to host a persistent agent user is around \$4 a month, or 10 times the cost of a chatbot user. Amazon.com has banned Muse as a shopper on the belief that if anyone should get paid to steer customers, it should be the store.
Expect today's agent hopefuls to compete on cost, point of access, third-party application tie-ins, consumer versus commercial use, data sovereignty, and permission—Muse likes to ask before doing things, while Instinct prefers a freer hand.
---
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Barclays says the first agents to lure customers to share connectors hold the advantage, and that Muse and OpenAI Dots are well positioned. BofA says that Apple can eventually win on trust, but that it will be difficult to do so while releasing major software updates only annually, because persistent agents grow more powerful every day. B
REVIEW & PREVIEW
51,176.96 Dow Industrials: -651.66
852.81 Dow Global Index: -6.41
Sign up for the Review & Preview daily newsletter at barrons.com/reviewpreview.
Overseas to The Rescue
Should investors give up on Netflix?
It has struggled to release hits that drive viewer engagement and, thus, the stock has suffered: As of Thursday, shares were down 25% for the year, and the stock has declined 37% since closing at a recent high of \$107.79 on April 16.
In Wall Street speak: yuck.
Deutsche Bank analyst Bryan Kraft contends the share price decline is an opportunity. “We believe the current (still very healthy) growth outlook is being undervalued,” he said in a client note.
His firm upgraded Netflix stock to Buy from Hold. Kraft believes that Wall Street's obsession with U.S. engagement overlooks the company's larger total market. Why? International engagement time has increased. This year's first half: U.S. minutes viewed were down 8.6%. The rest of the world: up 5.4%.
“We believe this advantage will allow Netflix to sustain its global leadership position,” Kraft said. “While U.S. viewing trends warrant monitoring...it is important to point out that all programmers experience cyclicality.”
This view isn't universal. HSBC has downgraded Netflix and noted that Alphabet's YouTube is taking viewer share from the streamer.
Yet Deutsche Bank believes the concern is overblown. And while some firms disagree, the majority are keen on Netflix. Per FactSet: 28 Buy ratings and 17 Hold ratings. So, chill. –Kit Norton
Rough Ride
Netflix stock has endured a lack of big hits.
Source: FactSet
Coming on Strong
Is YouTube TV bad news for Netflix?
YouTube TV Subscribers
12.5 million
Source: Resourcera
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LAST WEEK
September Stocks: The month is typically shaky. How did it compare to Septembers past? The Dow industrials averaged a 1.1% September decline from 1896 through 2025; this year, it took a 4.29% hit. For the S&P 500, it was a 1.1% average decline since 1928 versus -0.45% this year. The Nasdaq? Going back to 1971, it averaged a 0.8% decline. This September: up 1.86%.
AI Angst: OpenAI delayed the release of its GPT-6.1 Astra model. AI agents misbehaved by accessing government websites. Back in D.C., President Trump urged the AI bosses to tone down the gloom. Nobel laureate Paul Krugman joked: "Our technology...can destroy the world, so you'd better invest in our IPO."
No October Surprise? If you were placing bets on Polymarket that the Federal Reserve would raise rates this month, bad news for you. Three Fed officials indicated there was no rush for a pre-Election Day hike. A soft jobs report also assured Wall Street that the Fed will hold off.
Heat Treatment: Speaking of inflation, Northeasterners are facing a particularly chilling forecast: The National Energy Assistance Directors Association says winter's average heating oil bill will be 50% higher.
Oldies Act: What do you do when you have everything? You sue! Former Commerce Secretary Wilbur Ross, 88, and former casino king Steve Wynn, 84, challenged New York's annual pied-à-terre tax in a state court filing.
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THIS WEEK
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Monday 10/5
The Institute for Supply Management releases its Services Purchasing Managers' Index for September. Consensus estimate is for a 55 reading, slightly lower than in August.
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Tuesday 10/6
Constellation Brands reports quarterly results on Tuesday, followed by PepsiCo on Thursday and Delta Air Lines on Friday.
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Wednesday 10/7
The Federal Open Market Committee releases the minutes from its mid-September monetary-policy meeting. At that meeting, the FOMC unanimously voted to raise the federal-funds rate by a quarter of a percentage point, to 3.75% to 4%. With the release of this past week's better-than-expected inflation report and weaker-than-expected jobs report, traders are pricing in a 20% chance that the central bank will raise interest rates at its late-October meeting, down from a 65% chance last week.
---
THE NUMBERS
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Friday 10/9
The University of Michigan releases its Consumer Sentiment index for October. Economists forecast a 47.7 reading, roughly half a point less than the September data. Consumer sentiment remains in the doldrums.
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\$28 T
---
8%
Wealth of the top 0.1% richest Americans, doubling since 2019. The gains were mostly from stocks.
Jump in U.S. mini-van sales this year through August, to 281,000; total new-vehicle sales declined.
---
10%+
Yields on some new Paramount debt after the company's record offering of junk bonds.
---
230%
U.S. stock market relative to GDP–double the level it was during the late-1990s tech boom.
The Hottest Sector After AI Is Having a Moment
Quantum computing is becoming a commercial market. Just look at the wave of public listings this year, especially Quantinuum's landmark IPO.
BY MACKENZIE TATANANNI
As artificial intelligence dominates the headlines, quantum computing is gaining steam. Nowhere is that clearer than in public markets, where Quantinuum's landmark initial public offering and a wave of listings this year signal a shift: Quantum is moving from speculative sci-fi to an early commercial market. Late last month, Microsoft un-
veiled a new research center in Maryland, bringing its technology closer to independent evaluators from the government's Defense Advanced Projects Research Agency. IonQ announced that its latest system would be deployed at Nvidia's quantum research center, bridging classical hardware with quantum processors. And a technical paper claimed that IBM's Nighthawk processor took 19 seconds to complete a task estimated to take a supercomputer 110 years.
"A lot of the industry is still doing ‘toy problems,’ ” says Scott Crowder, IBM’s vice president of quantum adoption. “But the people on the leading edge are no longer doing that.”
Nowhere is that leading edge more apparent than in drug discovery, where quantum systems mirror the complex behavior of electrons and molecules. Amgen, one of the world's largest pharmaceutical companies, has embraced the technology to shorten the drug development timeline. A lead investor in Quantinuum's first major funding round, Amgen also collaborates with players like QuEra.
“I look at quantum the same way I look at other emerging technologies,” says Alan Russell, Amgen’s vice president of research and head of R&D technology. “What does it allow us to do that we couldn’t do before, and where can it meaningfully complement the tools we already have?”
For Amgen, that means tackling high-complexity computational challenges, from making sense of vast, intricate data sets to modeling interactions at the molecular level. Amgen,
like others, is looking for “quantum advantage,” or the point where quantum systems can complete a useful task more efficiently than the best available classical supercomputers. In theory, quantum advantage doesn’t require fully fault-tolerant systems, which detect and correct errors in real time. This milestone remains elusive, as scaling quantum systems makes them increasingly vulnerable to environmental noise.
Today's investments are about exploring capabilities and finding practical applications rather than unlocking immediate efficiencies. "For me, the opportunity isn't necessarily about streamlining operations, but understanding whether it can help us tackle scientific problems that are difficult to solve with today's tools," Russell says.
Enthusiasm is spreading across the healthcare landscape. Five years ago, Cleveland Clinic's quantum program started out of a cafeteria at its main Ohio campus. Launched during the organization's centennial to lay a foundation for the next century of care, the initiative centers on the Discovery
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Accelerator—a partnership with IBM spanning over 60 projects in AI, high-performance computing, and, of course, quantum.
“We had that long-term view, which is what every organization looking at quantum needs to have,” says Dr. Lara Jehi, Cleveland Clinic’s chief research information officer. “Otherwise it will never make sense as an investment.”
Researchers from Cleveland Clinic, IBM, and Japanese research institute Riken were nominated for the prestigious ACM Gordon Bell prize for their work in protein modeling. “The innovation was figuring out how quantum and classical can work together,” Jehi says. “It normalizes it, which in and of itself is a big validation.”
While an early attempt to predict postsurgery cardiac risks proved too complex for current hardware, Jehi sees immense potential in areas such as clinical trial logistics, supply chains, and staff scheduling across sprawling hospital networks.
"When we present quantum purely for drug discovery, we're limiting it to an application that only interests
IBM's quantum cabling and connectors
pharma,” Jehi says. “In reality, it could be applied in any research context across areas we haven’t done a good job of exploring.”
Enthusiasm extends to the federal level, where the Commerce Department unveiled a \$2 billion package in May to accelerate quantum technology. Alongside continuing efforts to secure domestic supply chains, Washington is targeting a 2028 deadline to deploy a “scientifically relevant quantum computer” at a national laboratory.
The push partly stems from security concerns. At the center of the debate is Shor's algorithm, a program capable of factoring large numbers at speeds no classical computer can match. The algorithm has never been used to break real-world encryption, but government partners emphasize that preparation can't wait, even with the timing and nature of the risk still unclear.
Bad actors will inevitably harness quantum power, particularly as cloud access lowers the barrier to entry. Industry giants like Amazon Web Services and Microsoft have created ecosystems that host third-party hardware, allowing developers to experiment with quantum algorithms.
"The quantum threat to our public infrastructure is very severe, very real, and certainly coming," JD Dulny, Booz Allen's quantum lead, tells Barron's. "We don't know what the world's going to look like in the next two to three years. Whenever a change shows up, as you've seen with AI, people are going to do amazing things and they're going to do awful things."
For investors looking to bet on quantum's future, pure-play market leader IonQ continues to draw strong interest, with BofA Securities recently initiating coverage of the stock with a Buy rating, citing strategic technical acquisitions such as its recent purchase of chip maker SkyWater Technology.
Government backing highlights other contenders. Infleqtion leads in defense applications like sensors and atomic clocks, while federal stakes in publicly traded players Rigetti Computing, D-Wave Quantum, and Quantinuum validate their respective hardware approaches. IBM remains a central player, though analysts debate how much quantum growth is already priced into the stock. B
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AI Will Transform Medicine. This Stock Stands to Gain.
Veeva Systems controls more than 80% of market share in biopharma customer-relationship management software. Its stock can rally 30%.
BY DAN VICTOR
A
rtificial intelligence is re-writing the rules of medicine, promising to accelerate drug development, optimize clinical trials, and bring lifesaving therapies to market faster.
Veeva Systems is making that transformation happen. The Pleasanton, Calif.-based company develops software for biotechnology and pharmaceutical customers to manage everything from research and development and regulatory submissions to day-to-day commercial operations. Its software was originally built atop Salesforce, but has since expanded to stand-alone applications.
"There is a huge opportunity for industry-specific AI to help life sciences get the right medicines to more patients," Paul Shawah, executive vice president of strategy at Veeva, says in a statement to Barron's.
As AI plays a bigger role in this workflow, Veeva stock looks like a solid bet into 2027. We see shares with a clear path to reclaim and surpass their record high of \$344 set in 2021. Veeva shares, currently trading around \$273, offer more than 30% upside over the next 12 months.
There are several reasons to like the stock. Veeva controls more than 80% of market share in biopharma customer-relationship management, or CRM, software. The company has been profitable for more than a decade, expanding sales tenfold since 2015.
Mawer Investment Management, a Canadian fund manager, began buying shares earlier this year. Analyst Renaud Paquin's bullish case is centered around Veeva's dominant competitive positioning. Healthcare's compliance technicalities, in particular, make it difficult for competitors to create alternatives.
“All the proprietary data ultimately makes Veeva an AI winner,” Paquin says.
That advantage on the front line of evolving workflows is exactly what Veeva aims to monetize next. A major strategic shift for Veeva since 2024 has been its push to migrate its core customer base off Salesforce onto its native Veeva Vault CRM. The multi-year process aimed at breaking free from that dependency is well under way. It allows Veeva to both capture higher margins and gain full control of the underlying architecture and user experience.
The migration has proceeded more smoothly than envisioned, with 14 of the 20 largest global biopharmas already committed to Vault CRM. In the process, Veeva has become the entry point for AI in the industry, with virtual-assistant-type features that boost productivity.
The vision with agentic AI is to go a step further, handling increasingly complex, multistep workflows with far less human involvement. The company's new Falcon platform targets processes that are otherwise time-consuming and employee-intensive.
The goal, Shawah says, is straightforward: “increasing speed and lowering costs.” One early example is medical, legal, and regulatory, or MLR, review of promotional materials. Falcon MLR is available now, with additional agents for clinical, regulatory, and safety work planned for later this year and into 2027. Veeva estimates its tools could eliminate up to 70% of certain manual administrative tasks and potentially accelerate drug timelines by 30% to 90%.
Global spending on task-specific agents is projected to more than double each year through 2029, at a 119% compound annual rate, to more than \$750
Veeva Systems
Cloud-based software for life sciences
Note: E=estimate; Estimates are for the fiscal year ending Jan. 2028.
Sources: Bloomberg, FactSet
Recent Price
\$285.45
52-Week Change
-4.2%
Market Value
\$46.2 B
2028E P/E
27.8
billion, according to Gartner. In many ways, biopharma is a natural fit for the technology, allowing companies to remove operational headaches and focus on what really matters—therapeutic breakthroughs.
In its fiscal second quarter, Veeva delivered revenue of \$928 million, up 18% year over year, and adjusted earnings per share of \$2.35, also up 18%. Strength in the core Vault CRM offering helped the company raise full-year revenue guidance to nearly \$3.7 billion and adjusted EPS to about \$9.21, the third upward revision this year, representing a 14% increase from last year.
Management continues to target a \$6 billion annual revenue run rate by 2030, implying average annual growth of 17.5% over the next three years.
Wells Fargo analyst Stan Berenshteyn is on board. Acknowledging that full monetization of agentic labor will unfold through next year, the adoption potential is high and could gain traction quickly. He rates shares as Overweight, equivalent to Buy, with a price target of \$330.
Veeva Systems aims to help AI with medical applications.
The stock currently trades around 27 times forward earnings—more expensive than the broader market and even Salesforce at 14 times, yet a discount to the company's historical average earnings multiple of 35 times earnings over the past five years. Veeva stock justifies a premium given the company's regulatory moat and high-quality fundamentals, including a balance sheet with zero debt.
It's a compelling story, but risks remain. The continuing transition off Salesforce onto Vault CRM introduces short-term execution variables that could impact near-term growth. Additionally, sentiment toward biotech, and AI in general, can shift quickly, adding volatility to Veeva's share price.
Notably, adding up Veeva's operating margin—which consistently runs above 45%—alongside top-line growth around 15%, the company scores well above the “Rule of 40,” a long-held value-creation benchmark in software. At a time when AI disrupters are struggling to generate consistent free cash flow, Veeva stands out with an underappreciated AI potential.
For now, Veeva offers investors a rare blend of defensive market dominance and aggressive growth upside. At the intersection of healthcare and technology, Veeva is a winner. B
INCOME INVESTING
TIPS could be the most appealing group of Treasuries since they protect investors from what they fear most–higher inflation.
Long-Term Treasury Bonds Could Be a Good Contrarian Bet
A n intriguing contrar-
ian play is long-term
bonds maturing in 20
to 30 years.
There are few fans of the sector, and the negatives are many.
They include intractable federal budget deficits, inflation around 3%, and heavy corporate borrowing for data centers to fuel the artificial-intelligence boom.
Losses have accelerated recently, as the yield on the 30-year Treasury has risen almost a half percentage point to 5.6% in the past month.
Bond maven Dan Fuss, 93, who formerly headed the Loomis Sayles Income fund, told Barron's recently it would “take a team of oxen to make me buy a 20-year bond.” BlackRock urged investors to underweight long-term Treasuries, citing “persistent inflation and high debt loads.”
Fuss argues investors should buy intermediate-term debt—he favors five-to-seven-year maturities—because it offers nearly as much yield as long-term bonds with less risk. BlackRock favors agency mortgage securities that now yield over 6%.
But there are good reasons to consider long bonds.
BY ANDREW
BARY
Yields now are at 20-year highs, with 20-year and 30-year Treasuries yielding about 5.6%. That yield could prove competitive with stocks over the long term and is safe, although there is the risk inflation will erode returns.
“This is one of the best entry points for long-term bonds we’ve seen in nearly two decades. Starting yields are one of the best predictors of forward returns in fixed income,” says Gene Goldman, chief investment office at Cetera Financial Group.
Long-term bonds could offer competitive returns if equity market returns cool. There is no law that says stocks should return 10%-plus annually, as they have done for the past 10 and 30 years. Historically, there are decadelong periods of poor equity returns. That's especially true with the U.S. stock market valued at over \$70 trillion. Long Treasuries also could offer a hedge against stocks if the economy weakens—effectively a put option on the S&P 500 index yield.
There is risk. Bond prices move inversely with yields, and long-term debt gets hit hardest when market rates increase. The \$47 billion iShares Treasury 20+ Year Treasury Bond exchange-trade fund is down more
than 10% this quarter.
Investors can directly buy individual Treasury bonds and TIPS from the Treasury at regular auctions at Treasury.gov and through brokerage firms and banks. They need to buy Treasury zero-coupon and corporate bonds through banks and brokerage firms like Fidelity and Morgan Stanley.
A good alternative to individual bonds are low-cost exchange traded funds. Here are four ETFs worth considering. The iShares 20+ Year Treasury Bond ETF has an average maturity of 26 years, with a current yield of 5.4% The Pimco 15+ Year U.S. TIPS Index ETF has a maturity of 22 years.
Barron's recently highlighted the appeal of 30-year munis yielding over $5\%$ . There also is a case for long-term Treasury bonds, long Treasury zero-coupon debt, long-term Treasury inflation-protected securities, or TIPS, and long-term corporate bonds. These securities are better suited to tax-advantaged accounts like IRAs, while munis belong in taxable accounts.
The Pimco 25+ Year Zero Coupon U.S. Treasury Index ETF has a maturity of close to 28 years and a 5.5% yield, and the Vanguard Long-Term Corporate Bond ETF has a 22-year average maturity and yield of 6.2%.
The Vanguard ETF holds investment-grade debt—mostly triple-B and single-A—and yields 6.2%, almost a percentage higher than the TLT Treasury ETF.
Treasury zero-coupon bonds, or strips, also have their attributes. A buyer receives no cash interest. The interest gets paid at maturity, although investors are free to sell them before that. They are called strips because bond dealers take a Treasury 30-year bond and strip it into the component parts—60 semiannual interest payments and the principal portion of the bond maturing in 30 years—and sell them separately.
A 30-year zero-coupon bond now yields about 5.5% and trades for about 20 cents on the dollar, meaning that an investor will see a fivefold increase in value over 30 years with no risk. Zeros allow investors to lock in a yield—unlike regular Treasuries, where the yield is dependent on investing interest payments at the stated yield.
There is rate risk with 30-year Treasuries, and especially with long-term zeros, but both have a nice feature: Returns are asymmetric in the investor's favor.
Zero-coupon bonds will rise in price more if rates fall than decline if rates increase, due to what bond pros call positive convexity. A 30-year Treasury should increase about 17% in price if rates fall one percentage point and drop 13% in price if rates rise one point based on Bloomberg data, and that drop will be partly offset by interest income. The risk/return on Treasury zeros is even better.
Unlike the underlying bonds in its portfolio, the Pimco 25+ Year Zero Coupon ETF pays interest from the periodic rebalancing of the portfolio. This helps investors pay taxes since they are taxed on the annual accreted interest on Treasury zeros.
TIPS could be the most appealing group of Treasuries since they protect investors from what they fear most—higher inflation. They pay an inflation component tied to the U.S. consumer price index and a bonus, or real, rate above inflation. For 30-year TIPS, the real rate is now 3.3%, which is attractive historically. Essentially, investors are able to get a risk-free 3.3% return above inflation.
The current break-even inflation rate is only 2.3%. This means that if inflation runs above that rate—not a bad bet—investors will do better with TIPS than regular Treasuries. The break-even is calculated by subtracting the real TIPS yield from the Treasury 30-year bond yield.
Given high current rates, it might be smart now to buy that which has been most toxic—long-term bonds. B
---
Playing the Long Game | ETF / Ticker | Recent Price | YTD Total Return | Recent Yield | Fund Assets (billion) | Avg. Bond Maturity (year) | Expense Ratio | iShares 20+ Year Treasury / TLT | $78.62 | -7.0% | 5.4% | $46.6 | 26.0 | 0.15% | Pimco 15+ Year U.S. TIPS Index / LTPZ | 45.36 | -8.2 | 6.9 | 1.0 | 21.6 | 0.20 | Pimco 25+ Year Zero Coupon Treasury / ZROZ | 55.20 | -11.8 | 5.6 | 1.9 | 27.8 | 0.15 | Vanguard Long-Term Corporate Bond / VCLT | 68.97 | -5.6 | 6.2 | 8.4 | 22.0 | 0.03 | Sources: Bloomberg, company reports
Alleged Ponzi Scheme Left Investors in the Lurch
Z Squared began trading on Nasdaq in April, part of a plan to get investors out of the Broadstreet private-equity fund.
---
BY BILL ALPERT
Two days after Z Squared began trading on Nasdaq in April, its executives rang the closing bell, joined by trader and television commentator Jon Najarian. A month later,
the crypto mining firm got tapped for the FTSE Russell 2000 index.
That April debut was part of a plan to get unhappy investors out of a private-equity fund called Broadstreet and, in so doing, refute fraud charges that the Securities and Exchange Commission is pressing against Broadstreet's leaders. In Miami's federal court, the SEC accuses Broadstreet's top three executives of raising \$1.2 billion from more than 1,000 investors in a “Ponzi-like” scheme that promised annual returns as high as 28% from things like real estate development, small-business lending, and Dogecoin mining.
While fighting the SEC fraud charges, which they “categorically deny,” the Broadstreet executives redeemed more than 1,300 investors by giving them most of Z Squared’s stock before it started trading. Broadstreet is now trying to redeem its remaining investors with shares in Soulpower Acquisition, a New York Stock Exchange-listed blind-pool special purpose acquisition company run by a self-improvement author.
In July, Broadstreet told the Miami federal court that these shares in the two public companies were worth \$3.6 billion and that investors had suffered no losses.
Yet since their April redemption, the Broadstreet holders have seen their Z Squared shares fall nearly 80%. The two stocks' combined market value is barely \$550 million. Investors tell the SEC that they went into Broadstreet expecting quarterly distributions of cash income. Those payouts halted last year for many investors.
“I did not want speculative stock,” said 64-year-old Broadstreet investor Nikhil Patel, in a federal court declaration filed in August, after Broadstreet sued him and other investors who asked for cash instead of stock.
“I am retired and disabled,” Patel told the court. “[M]y Broadstreet investments represented a substantial portion of my retirement savings.”
Broadstreet says its investors signed releases, agreeing to everything the private-equity firm has done.
"This is a case about ultrarich investors who have now enlisted the government's help to try to have them get their money back in an investment where they self-described themselves as wealthy risk takers," Lorne Berkeley, a lawyer who represents Broadstreet and its executives, told Barron's. "Broadstreet is proud of the two public company exits presented to its investors who overwhelmingly approved the exits."
Two brothers, Joseph and Steven Baldassarra, created the Broadstreet private-equity fund in Greenville, S.C., in 2020.
In 2022, they brought in attorney David J. Feingold as Broadstreet's CEO. In 2011, he and two co-defendants paid \$18.8 million to settle—without admitting—charges by the Federal Trade Commission that the First Universal mortgage modification business deceived indebted homeowners by charging thousands of dollars in upfront fees while doing little to relieve the customers' debts.
Apart from his SEC case, Feingold is fighting the Internal Revenue Service in a Greenville federal court, after it assessed fraud penalties and alleged that he dodged taxes on millions he got from Broadstreet affiliates.
Neither Feingold nor the Baldassarras responded to Barron's' questions beyond their lawyer's statement.
Working out of a Greenville building owned by Feingold, Broadstreet salespeople recruited investors with the help of outside stockbrokers. Most of the investors' declarations in the Miami federal court docket said they had learned of the firm through friends and family.
The firm told investors they were putting their money in any of 14 separate strategies, from home-building to crypto mining.
In a first-quarter 2024 report to investors, Broadstreet boasted that its Dogecoin mining operation was on track to double that year. “The Manager has targeted a 28% annual return,” it told investors.
The SEC started investigating Broadstreet in 2022, and in January 2025 the agency filed a sealed complaint alleging that the Broadstreet bosses used new investors' money to pay inflated returns to those in strategies that were actually unprofitable. Two days after the SEC filed suit, a federal judge ordered Broadstreet to stop soliciting new money.
Feingold denied the charges and asked the federal judge to let Broadstreet keep raising money. He told the court in February 2025 that he ran the 14 businesses, while the Baldassarras ran the funds. Broadstreet's real estate ventures provided thousands of jobs in the Carolinas, said Feingold, and it ran 16,000 Dogecoin mining computers in five data centers and had five more centers coming on-line.
"We have nearly \$225 million worth of machines that consume 100 Megawatts of power or enough energy to power nearly 120,000 homes," Feingold told the court. "It is a massive business."
Dallas-based Kinjalkumar Patel, who invested in the crypto mining offering in May 2023, later told the court that Broadstreet cash payments on his investment came to a halt in March 2025. He said he and his wife had put all of their savings into Broadstreet.
That's when Feingold and the Baldassarras began telling investors that Broadstreet would let them exit their investments for cash, or for shares in a couple of public companies.
Investors in the Dogecoin business learned the next month that they
Source: FactSet
would get shares in a money-losing biotech company called Coeptis Therapeutics Holdings as a swap for 9,800 of Broadstreet's crypto mining computers.
SEC filings by Coeptis in June 2025 said that accounting firm Cohn-Reznick's partners Anthony Doughty and Jake Wright appraised the mining systems in March 2025 at a value of \$660 million, or \$67,378 per unit. The filings said the valuation had assumed the machines were all Antminer L9 systems when, in fact, 84% of the fleet were L7s—an older, less-powerful system.
The \$660 million CohnReznick valuation led to Broadstreet investors getting 85% of the merged company's shares when the deal went effective in April 2026. A pro forma balance sheet in the merger proxy filing showed that the Broadstreet business had carried the mining systems at only \$35.3 million.
The CohnReznick partners didn't respond to Barron's queries about their valuation.
Nearly 700 Broadstreet investors had elected to take cash, the SEC later told a court. Broadstreet said it would distribute the cash and stock this year. When the time came in May 2026, Broadstreet took the cash option off the table, telling every investor that the fund could force them to take stock.
When it was tapped for the Russell 2000 in May, Z Squared had yet to report any financial statements. FTSE Russell told Barron's that the information available at the time satisfied Russell's eligibility and investibility criteria.
Z Squared's June-quarter financial statements did appear on Aug. 13. The balance sheet carried the crypto mining fleet at \$12.4 million, or \$1,269 per unit.
That was less than 1/50th the value ascribed in the merger, two months before.
Z Squared CEO David Halabu told Barron's that CohnReznick estimated the fair market value of the company's crypto mining operations, not the cost or resale value of the machines.
A large market value is hard to see in Z Square's only public financials. In the June period, it lost money on its Doge mining activities.
“Altcoin mining economics have deteriorated sharply with underlying token prices falling precipitously," Halabu said. "Some miners have shut down operations entirely."
As a new initiative, Z Squared hopes to develop data centers for artificial-intelligence computing. The crypto mining fleet isn't suited for AI modeling, says Halabu.
Z Squared shares have plummeted to \$3.95 from \$18.80 since their April debut, even though company filings say it gave slugs of stock to Najarian and others, under contracts to promote the stock at the NYSE, in broadcasts, and online. Inquiries to Najarian's investor relations business weren't answered.
Broadstreet, meanwhile, has been working to redeem most of its remaining investors by giving them stock in Soulpower, a SPAC that said in November of last year it will merge with a business that would contribute a British Virgin Islands banking license, land and mines in places like Mexico and South Africa, and 23 properties in the Carolinas from Contender Development, a company that Feingold told the court he partly owns. Drawing on another CohnReznick appraisal, Soulpower said the resulting company would be worth over \$8 billion.
“SOUL will be the most loved bank on earth,” said Soulpower CEO Justin Lafazan in that November deal announcement. He declined to discuss the Broadstreet exchange deal with Barron’s.
At the same time, Broadstreet is suing five investors who continued demanding cash instead of Soulpower stock. The firm seeks a court ruling that it can redeem them with stock. It is also suing an investor for defamation over comments she posted on X.
As Broadstreet executes its plans to rid itself of outside investors, the SEC has renewed its request for the judge to appoint a receiver who would take control of the private-equity investments. If not stopped, the agency told the court on Sept. 10, the investors will end up with locked-up shares of Z Squared and Soulpower, while Feingold, the Baldassarra brothers, and other Broadstreet insiders end up with the remaining cash and assets.
"The manager does not have the power to redeem investors with anything it wants, like bags of rocks," said the SEC in its September court filing. "All of this is the natural result of a fund that promised and paid returns it could not afford to pay." B
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AI Agents Got Cash to Trade Stocks. What They Did Next.
An investor gave AI agents \$500 each with one daily prompt: Make as much money as you can. Stockbrokers shouldn't worry...yet.
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BY ANDREW WELSCH
t's a niche but growing part of the agentic craze: using artificial-intelligence bots to trade stocks with little to no human intervention.
Since Robinhood Markets launched agentic trading in May, more than 150,000 customers have opened agentic trading accounts, according to the company. AI agents use Robinhood's tools almost 30 million times a day. A month after brokerage firm Public made AI agents available to all users, customers created 20,000 agents and more than \$200 million in assets are overseen by AI agents, according to Public.
But do they work? And can they beat the market? That has been more mysterious; agents' trading habits have been a black box. But a new report from Condor Capital Wealth Management, which has studied robo-advisor returns for years, sheds light on these agents as traders. Barron's got an exclusive look at the data.
Condor gave three AI agents \$500 each and provided the same daily prompt: Make as much money as you can. Their behavior offers a sneak peek into the future of agent-led trading, a world in which automated bots use sophisticated AI models to buy, flip, rebalance, and harvest tax losses. All before your stockbroker wakes up.
The agentic trading tests conducted by Condor involved Anthropic's Claude, Alphabet's Gemini, OpenAI's ChatGPT, and accounts at three brokerage firms: Robinhood, Webull, and Public, which have all turned on the ability to plug AI models into dedicated agentic accounts. (Other firms, including Interactive Brokers and eToro, are also now offering agent plug-ins.)
For now, at least, those brokers can rest easy. The agents aren't generating a significant edge. After three days of trading, returns for Claude and Gemini were $2.9\%$ and $0.9\%$ , respectively. ChatGPT posted a loss of $0.7\%$ .
In the trading test, Condor told agents to use stocks and exchange-traded funds only, and return to 100% cash by the close of each trading session.
Each agent also scheduled its own cadence for check-ins and trades. Condor says Claude and ChatGPT tried similar approaches, searching the web for what profitable traders supposedly do; that led them to loosely copy a kind of momentum trading strategy. Gemini checked in a handful of times a day, never set a stop, and only ever traded Nvidia shares.
Claude scheduled for itself 10 check-ins a day and journaled lessons to itself. For example, when Claude bought into the top of an opening spike and had to sell at a loss, it wrote the mistake into instructions that Claude prepared for itself, Condor says. The following day, Claude canceled two orders rather than chase a big rally at the open. “It noticed something, wrote it down, and behaved differently the following day,” states Condor’s research report. “The loop is simple, but it offers a glimmer of what self-learning agents will eventually be able to do.”
Condor cautions that the test was intentionally simplistic. Given detailed and continuously updated instructions, the agents might perform better. But that would mean more work and, importantly, judgment on behalf of the user.
"The average person who needs money management does not want to manage a system to that level of detail, so the agent is worth the most to the people who need help the least," says Condor's report.
The tests come with agentic technology poised to play a greater role in the investing experience. Some brokerage industry executives and analysts think it could lead to higher trading volumes as more investors begin using AI for research, automation, and other tasks.
Yoni Assia, CEO of brokerage firm eToro, says trading volumes typically rise in the morning and fall at night. "But for agents, there is no morning or night," Assia says. "It can trade all the time."
Agents, to be sure, aren't just day traders. They can also be used to set asset allocations and long-term portfolio construction. In a separate test, Condor tasked multiple AI agents with creating a 60/40 portfolio composed of stocks and bonds. Claude, ChatGPT, and Gemini picked the funds and decided when to rebalance. In each instance, they bought only a handful of low-cost index funds from Vanguard and BlackRock's iShares. All three agents chose Vanguard's low-cost Total Stock Market ETF and its Total International Stock ETF. Who would've guessed Claude was a Boglehead?
Leif Abraham, co-founder and co-CEO at Public, says customers who have started using AI agents are moving more assets to Public than those who haven't begun yet. He doesn't think it's a short-term trend. "Once you start using the AI agents, you're not going back," he says.
---
Condor's AI tests follow a similar approach to what Condor took with the robo-advisor reports that the firm began producing a
that the firm began producing a decade ago. Condor opened accounts at robo-advisors with real money and tracked the results to see how well a new technology could manage a portfolio on behalf of investors. Condor's robo report was the foundation of Barron's ranking of robo-advisors.
Condor's tests come with some caveats, such as a short testing period and small balances. Given rapid advances around AI, the same test could yield different results next year, or even next month. "It's pretty powerful, you can do a lot with it, but it is still very early days," says David Goldstone, manager of investment research at Condor.
Executives from Robinhood, Webull, Public, eToro, and Interactive all told Barron's that agentic trading remains a niche activity, but they see applications for a mainstream audience on the horizon.
As for the AI labs, OpenAI and Alphabet didn't respond to questions about agentic trading. Anthropic declined to comment.
---
The AI Day Traders
The do-it-yourself agent movement may turn out to be a brief moment in time. Condor's testing suggests that
To test a new class of AI agents, Condor Capital deposited \$500 at a brokerage firm and gave each agent simple instructions: Make as much money as you can in three days. | Return on $500 | Self-chosen check-in cadence | Tickers traded | Claude Opus 5 | 2.9% | 10 scheduled check-ins per day | NVDA, SOFI, HOOD, PLTR, INTC, MARA | ChatGPT-5.6 Sol | -0.7 | Every 5 minutes, about 75 per day | NVDA, IWM, MSFT, AMZN, PLTR, AMD, QQQ, CMG, SHOP | Gemini 3.1 Pro | 0.9 | 5 to 8 per day | NVDA | Source: Condor Capital Wealth Management
---
Building Blocks
Condor tasked AI agents with constructing a 60/40 portfolio of stocks and bonds. Every agent chose low-cost index funds. | Ticker (Role) | Percentage of Portfolio |
Claude Opus 5 | VTI (U.S. total stock market) | 40% | VXUS (International stocks (ex-U.S.)) | 20 | VTEB (Muni bonds) | 40 |
DIY agentic trading, which uses so-called model context protocol, or MCP, isn't for the average person. It requires modest technical skills to set up, and investing savvy to direct the AI bot.
"This stuff is really powerful for people interested in doing this sort of thing and who know what they are doing, or are willing to get themselves into a little trouble," says Kristopher Jones, Condor's business innovation strategist who was involved in setting up the accounts. It isn't an out-of-the-box solution.
But the barrier to broader adoption is starting to come down. Public already makes AI agents available via its platform, in addition to the MCP option. Public's Abraham says that its proprietary AI agent offering can be easier to use for some customers, and that the firm has access to data sources that outside AI chatbots might not. The human user still has to approve an AI's actions at Public.
Abraham says AI agents are skilled at turning a customer's investing idea into an actionable plan. “They aren't designed to give you ideas,” he says. “There is an important nuance there. You have a kernel of an idea of what you want to do, even if you haven't fully formed the idea of how you want to do it, and the agent can help you.”
---
This past week, Robinhood unveiled Robinhood Agents, an agentic trading offering available via the company's
app that allows users to chat with AI agents to research, develop trading strategies, and execute trades in dedicated agentic accounts. The agent can access funds only in a user's dedicated agentic trading account, and users can choose to manually approve each trade. Robinhood allows users to choose from a lineup of existing AI models, including ones from OpenAI. The MCP option remains for users who want to connect their own third-party agents, but Robinhood executives believe that Robinhood Agents will become the preferred agentic trading method for most customers.
"[The MCP option] is complicated; it involves using multiple devices and different apps," said Abhishek Fatehpuria, vice president of product management, at a company event unveiling Robinhood Agents. "And oftentimes the connections between these different apps are slow and brittle."
Anthony Denier, group president and U.S. CEO of Webull, says his company is also working on embedding agentic trading in its platform. He believes that will lead to greater adoption because there are a finite number of investors willing to do the work to connect their own AI agents through an MCP. “When the agent is directly accessible on the platform itself, then the TAM [total addressable market] explodes,” he says.
At Webull, customers using an agentic account have to approve transactions themselves and be logged into their account. "They can't set it up and go on vacation," Denier says.
Brokerage industry executives say they're getting increased demand from customers for AI tools. They are contemplating a future in which all investors interact with their brokerage accounts via an AI chatbot, even if they aren't using it to execute trades.
Webull's Denier compares it to the transformation driven by the internet and smartphones. “I think in five years’ time, the majority of transactions will happen through an on-platform agent,” he says. “That is a huge shift in our business. If we aren’t ahead of that now, if we aren’t building that experience now, then we will fall behind.” B
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A Divided Stock Market Could Set Up a Serious Rally
Yes, the market is being led by a handful of highfliers. But that isn't a bad thing.
●
BY ALEX ROSENBERG yawning gap has opened up inside the stock market that to some looks like an abyss. We see an opportunity.
On the sur-
face, the stock
market is doing just fine. The S&P 500 index ended September with a loss of just 0.5%, and is less than 1% below the record high it set in August. That's certainly better than might be expected, given that the Federal Reserve has started raising interest rates, the 10-year Treasury yield just hit its highest level since 2002, and the Iran war continues with no end in sight, giving a boost to energy prices. Meanwhile, there are still lingering questions about the artificial-intelligence trade, from the fundamental—how will Anthropic and OpenAI turn a profit?—to the existential—will artificial intelligence mean the end of humankind?
A glimpse beneath the surface reveals that these concerns are affecting stocks—just not at the index level. While the market-cap-weighted S&P 500 fell 0.5% in September, an equal-weighted version dropped 5% and is on pace for its seventh straight weekly loss, a losing streak previously seen only in 2002 and 2022.
It gets worse. Not since 2000 have more S&P 500 stocks made 52-week lows than 52-week highs when the overall index was within 2% of a record high, according to BTIG Chief Market Technician Jonathan Krinsky, an ominous sign for a market that has drawn more than a few comparisons to the dot-com bubble.
The divide in the market is wide and getting wider. Out of the 11 S&P 500 sectors, only information technology and communication services rose in September. Chips, though still down from their record high, contributed, too, with the PHLX Semiconductor Index surging 9.5% in September, while the Roundhill Magnificent Seven exchange-traded fund rose 4.3%. And it's impossible to overstate the impact of Meta Platforms, whose 27% September Muse-inspired rally added 0.6% to the S&P 500's monthly performance.
Some worry that this strange dynamic presages a broader decline for the S&P 500. Krinsky acknowledges that beaten-down sectors could bounce, but says the most likely scenario is that “the leaders succumb and major indexes catch down to what the majority of stocks have been doing.” Famed bond investor Jeffrey Gundlach describes the problem in arboreal terms, telling David Rosenberg that, like a particular century-old silver maple in his yard, the market has hollowed out after rotting from the inside and is now “on the edge of complete failure.”
The market's bad breadth, however, looks quite different from other episodes of narrow markets. Investors aren't simply bidding up a small set of winners into nosebleed territory. Nvidia, the world's biggest stock, has seen its price/earnings ratio fall below the overall market's even as it has rallied $24\%$ this year. Meta's valuation has fallen this year, as well, despite its September surge. That's in contrast to the dot-com bubble, when the valuations of heavyweights like Microsoft and Cisco Systems surged.
The poor breadth also looks more rational this time around. Rather than the bifurcation between the “old” and “new” economies seen during the dot-com bubble, investors are trying to gauge the winners and losers of AI in real time. Take the Meta rally. As that stock soared, shares of companies like Planet Fitness and New York Times stumbled, hit by fears that the new personal AI agent, Muse, will help paying customers cancel subscriptions to services that they no longer use. Charles Schwab and Bank of America, meanwhile, dropped over concerns that the technology would flush investor cash out of ultralow-yielding accounts. Investors aren’t gripped by some speculative frenzy; they’re articulating a holistic and reasonable thesis about the winners and losers in an AI-driven economy.
A similar dynamic is playing out elsewhere in the market. The surge in the price of diesel has benefited refiners like Valero Energy and Phillips 66, which hit fresh all-time highs last month, while air carriers like JetBlue Airways and American Airlines Group have been struggling. And while rising rates are generally negative for equities, a higher-yield environment is certainly harder on companies that have large amounts of floating-rate debt, or whose potential cash flows are many years away.
“Maybe the real theme,” says John Marshall of Carrick Lane, “is that the trends that are most prominent in the market now all have winners and losers.”
Stocks Shrug as Bonds Shake
The bond market's volatility isn't being reflected in the VIX.
Source: Bloomberg
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Equal Weight Gets Weighed Down
While the S&P 500 has been steady, the index's equal-weighted counterpart has been falling.
Source: Bloomberg
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Tech Support
Just four stocks are responsible for almost half of the S&P 500's year-to-date performance.
YTD contribution to S&P 500
Note: Data are as of Oct. 1
Sources: Bloomberg, Barron's calculations
Perhaps the focus on market breadth, then, is missing the point. Owen Lamont, portfolio manager and researcher at Acadian Asset Management, says it's “crazy” to argue that the stock market is risky just because it's highly concentrated. “If you took the Magnificent Seven, and broke each into seven smaller firms so it was the Magnificent 49, why would that be any better?”
The historical record suggests that breadth isn't the bad omen that you might think it is. "It's always preferable to see a market rally on broad participation rather than a small group of stocks, and the durability of narrow rallies is more dependent on that narrow group of stocks," writes Bespoke Investment Group. "Contrary to popular wisdom, though, weak breadth alone hasn't been a reliable bearish short-term signal. In prior periods when breadth deteriorated but price held up relatively well, forward returns saw little in the way of a negative impact."
After all, indexes, unlike silver maples, are recomposable. As failing companies lose value, they are replaced within the index by up-and-coming names—not because the index masters are betting that these incoming companies will outperform the outgoing ones, but simply because they’re striving to maintain an index that continually gives the most accurate read on the segment of the market in question, such as large-cap U.S. stocks in the case of the S&P 500. Out of the 500 companies originally included in the S&P 500 in 1957, only about 50 remain. Like Theseus’ ship, the market keeps sailing on.
And the weather might soon get more temperate. Like Krinsky, Morgan Stanley Chief U.S. Equity Strategist Mike Wilson believes that “the divergence between the index and breadth must be reconciled,” and he says the most likely scenario is that the overall market will slip in the weeks ahead. But he remains fundamentally bullish. “If bond volatility doesn’t calm down, we see breadth and price meeting in the middle in the next month followed by a strong finish to the year,” Wilson writes. “If bond volatility subsides sooner, breadth is likely to catch up to index price, driving both higher in the near term.”
One thing that could calm the bond market is a resolution to the conflict in Iran. “I’m in the camp that we’re going to find a solution in Iran,” says KKM
Financial CEO Jeff Kilburg. “I think we get out this month, and then we see crude oil crack, and we see rates crack,” with the 10-year yield falling back below 5%.
Another catalyst: the start of earnings season. It's a truism on Wall Street that investors seem to worry about all of the macro headwinds during the months between earnings seasons, only to be reminded just how good they have it when the next crop of reports comes around. And third-quarter earnings season should be better than good. Analysts collectively estimate that S&P 500 companies will report year-over-year earnings growth of $29\%$ for the quarter, which would mark the third-straight quarter of earnings growth about $25\%$ , according to FactSet.
A cooling-off in oil prices and rates, "in conjunction with earnings season showing us yet more $25\%$ -plus profit growth, is the catalyst for a run-up to 8000 in the S&P," Kilburg says, referring to a level $4.4\%$ above Thursday's close.
Finally, the overhang of the midterm elections will pass after Nov. 3. “Historically, U.S. equity volatility has tended to rise in the months leading into the midterm elections,” writes Dubravko Lakos-Bujas, head of global markets strategy at J.P. Morgan. Given that implied volatility has remained remarkably low, he does think there’s room for the Cboe Volatility Index, or VIX, to rise from here. But he adds that the elections “should serve as an important market-clearing event. Historical performance in the months following the midterms tends to be positive.”
The great hope is that all of the major drivers of macro uncertainty will recede, while companies continue to report boffo earnings. That may be a bit too much to expect. But we do know that overall stock market valuations have fallen meaningfully this year, and have continued to decline during the past eight weeks of market churn.
Far from being complacent, investors are acutely aware of the pressures caused by rising rates, which is why the average stock has performed so poorly. In fact, according to Goldman Sachs, overall U.S. equity sentiment has fallen sharply into the negative, and is now as low as it was in March. As long as the AI narrative holds together, and earnings aren't terribly disappointing, the market is setting up for strong close to 2026.
Even if the rising tide doesn't lift every stock. B
Focused Funds Can Help You Navigate a Top-Heavy Market
How a “core and explore” approach, with index funds at the core, could give investors an edge in a market dominated by an increasingly small group of technology names.
Y
ou can't time the market. But maybe you can increase your upside or limit your downside with a concentrated fund.
Anyone watching the market knows that a mere
handful of stocks have accounted for most of the gains in recent years. It isn't a novel phenomenon. In fact, it has been true for at least a century. And that fact should make many investors take another look at their stock fund strategies.
From January 1926 through December 2025, just 46 stocks—out of 29,754 common stocks listed on the public U.S. stock markets over that period—accounted for half of the \$91 trillion in net wealth creation, according to a study published in March titled “One Hundred Years in the U.S. Stock Markets.” Worse, the median buy-and-hold return for all those stocks was a negative 6.9%.
The study's author, Hendrik Bessembinder, a professor of finance at Arizona State University's W.P. Carey School of Business, calls people's reaction to his findings a “Rorschach test” of their investment styles. “For the large majority of investors, the evidence just strengthens their view about the desirability of a well-diversified, low-cost portfolio without a lot of trading,” he tells Barron's. “My evidence says if you pick 10 stocks at random, most likely you're going to underperform.”
Yet other investors are looking for a big hit. “The chances of getting a 100-bagger are much better if you pick one or two individual stocks and try to find the next Amazon.com as opposed to buying the whole basket,” Bessembinder says. This group either does their own stock-picking or hires skilled money managers who hold a concentrated portfolio of just a few hoped-for outperformers.
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Core and Explore
Vanguard Group founder Jack Bogle argued against searching for needles in a haystack in favor of “buying the whole haystack” with a broadly diversified index fund. Yet searching for a few needles with a top focused-fund manager can help amplify returns in the good times or buffer a largely indexed portfolio in the bad.
"It isn't an either/or decision," says Jason Subotky, co-manager of the AMG Yacktman Focused fund.
“You could be largely indexed, but then still have exposure to the managers that you know are doing something to add value significantly.”
Such a strategy is known as “core and explore” on Wall Street.
"If you look at the lost decade from the end of the 1990s to the end of 2009, that's what really helped people discover us because we were able to generate very strong returns against an index for the S&P 500 that went nowhere," Subotky says.
From Dec. 31, 1999, through Dec. 31, 2009, Yacktman Focused gained a cumulative 206% while the Vanguard 500 Index fund lost 2%, according to Morningstar. Then again, if you look at Vanguard 500 from Dec. 31, 2009, until today, it gained 832% versus Yacktman's 569%. Clearly, there are advantages to owning both funds, although it's notable that Yacktman won over the entire period, up an eye-popping 1,944% versus the S&P 500 fund's 811%.
Then there is the question of how to index. While the largest companies have recently outperformed, that hasn't always been true. "For most of history, buying the largest stocks has been a notably bad investment," says Bessembinder. If it's impossible to predict which stocks will win in advance, a better index strategy might be to equal-weight stocks instead of piling into the largest ones, as market-cap weighted indexes like the S&P 500 do. A few focused funds paired with an exchange-traded fund like Invesco Russell 1000 Equal Weight could be one way to square the circle.
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High Quality
An index fund core helps because focused-fund returns tend to be “lumpy”: Even the best funds often have bouts of underperformance followed by dominant periods. But the worst funds can be extraordinarily volatile from being too concentrated in risky companies. (For this article, we define “focused” as funds with 50 stocks or fewer.)
Good focused funds tend to have one factor in common—a penchant for high-quality companies with strong businesses and clean balance sheets. "We generally talk about quality companies that have staying power," says Tom Hancock, co-manager of the GMO U.S. Quality ETF, which currently holds 43 stocks. These are businesses he can picture being “relevant and vibrant five to 10 if not 100 years out.”
GMO's \$5 billion ETF, which launched in 2023, is similar to its older institutional-only mutual fund, GMO Quality, which has beaten the S&P 500 index and $94\%$ of its peers in Morningstar's large blend category with a $16.1\%$ 10-year annualized return.
Although valuations matter to Hancock, he subscribes to Warren Buffett's philosophy that it's better to buy a wonderful company at a fair price than a fair company at a wonderful price. "If you're thinking with a long time horizon, the entry-point [valuation] doesn't really matter as much," he says.
Hancock holds different buckets of stocks. There are quality growth stocks like Microsoft and Alphabet and core quality “stable ballast” ones such as Johnson & Johnson and Procter & Gamble. (Quality value refers to temporarily out-of-favor companies in cyclical industries.)
Some companies shift from one category to another. Software names Accenture and Salesforce are now considered value stocks. “Two or three years ago, we would have called those uncontroversial growth companies, and today they’re under a big cloud,” Hancock says. He calls the threat to them from artificial intelligence “overblown.”
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Core Focused
Because value and growth styles go in and out of fashion, a focused fund ideally should incorporate both strategies, as does GMO's ETF, so returns are less lumpy. The JPMorgan Equity Focus ETF typically invests in the 20 best large-cap ideas from J.P. Morgan Asset Management's growth team and 20 from its value team, and tilts the portfolio slightly toward growth or value in different market environments. Manager Felise Agranoff runs the growth side of the portfolio and Jack Caffrey, the value. Both have over two decades of experience at J.P. Morgan and work with some 50 analysts and another co-manager, Graham Spence, to research companies.
Having such a deep analytical bench gives Agranoff the confidence to invest 9% of the fund's portfolio in AI chip maker Nvidia. "Our views on Nvidia have evolved over time," she says. In 2023, when the ETF purchased the stock, "we were extraordi-
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narily bullish because we felt the market underappreciated both the magnitude and duration of spend around generative AI and Nvidia's dominant position." Since then, based on valuations and the competitive outlook from rivals like Broadcom, she has adjusted her position, adding to it recently as the stock price came down.
Although the ETF can tilt toward value, as it did in early 2026, Caffrey tends to hold smaller individual positions. Value stocks are more cyclical than growth ones, so being too exposed to any individual one could be riskier. Still, in economically sensitive sectors, he holds the highest-quality names like Morgan Stanley in financial services and ExxonMobil Holdings in energy.
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Focused Growth
While a core focused fund offers balance, if you want that “100-bagger” stock, you could tilt toward a growth or value fund depending on market conditions. No question, the Alger Focus Equity mutual fund and its newer companion ETF, Alger Concentrated Equity, have been on fire lately.
Alger Focus Equity, with just 42 stocks and a 47% tech weighting, has beaten 97% of its peers in the past 10 years with a 21.7% annualized return.
It is run by co-managers Patrick Kelly and Ankur Crawford, while Alger Concentrated Equity holds 30 stocks and is run by Crawford alone. Launched in 2024, the ETF has a lower $0.56\%$ expense ratio, but a higher $14.8\%$ Nvidia weighting versus the mutual fund's $12\%$ .
Yet Crawford isn't afraid of drilling down into lesser-known names. The ETF holds shares in three private companies: Anthropic, Figure AI, and VAST Data. “Figure AI is one of the leading humanoid companies in the U.S., and we're just at the very beginning of the humanoid revolution,” she says. “The use of robots is going to allow us to have an industrial renaissance in the U.S.”
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Focused Value
Still, one should expect more lumpiness with such a tech-heavy fund. In 2022's bear market, when highly valued growth stocks crashed, Alger Focus Equity fell $36.0\%$ compared with the average large-growth fund's $-29.9\%$ and the S&P 500's $-18.2\%$ .
The PGIM Jennison Focused Value and Putnam Focused Large Cap Value ETFs have a more balanced approach toward concentration. Neither takes big sector bets against
their Russell 1000 Value benchmark, which recently held 21% in tech. Although value stocks in general did better in 2022, Putnam Focused Large Cap Value stood out, with only a 2.6% loss, while PGIM Jennison Focused Value's parent mutual fund, which will merge with the PGIM ETF in November, lost 11.1%.
Neither fund is what one would call a deep value or classic value fund because of their emphasis on high-quality stocks. Both portfolios have average price/earnings ratios around 17. That's less than the S&P 500's 20, but higher than the long-term average 16 P/E for stocks in an already pricey market.
Contrast that with AMG Yacktman Focused's 12.6 average P/E or Davis Select U.S. Equity's 12.8 P/E. But you have to accept the lumpiness. Subotky and manager Stephen Yacktman say they held their top AI stock darling, Samsung Electronics, for about a decade before it did much of anything.
Meanwhile, Davis Select manager Chris Davis' largest position, Capital One Financial, has sunk recently because investors are worried about the integration of its most recent Discover acquisition and exposure to sub-prime debt. But Davis thinks the company's true value in an AI-besotted
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The Core-and-Explore Portfolio
Focused-fund returns can jump up and down, so it's best to pair them with an index fund. | Fund / Ticker | Morningstar Category | No. of Stock Holdings | 1-Yr Return | 5-Yr Return | 10-Yr Return | 15-Yr Return | Expense Ratio | 5-Yr Volatility | Alger Concentrated Equity / CNEQ | Large Growth | 30 | 17.8% | N/A | N/A | N/A | 0.56% | N/A | Alger Focus Equity / ALAFX | Large Growth | 42 | 18.4 | 19.3% | 21.7% | N/A | 0.99 | 23.1 | AMG Yacktman Focused / YAFFX | Global Large-Stock Value | 45 | 38.2 | 11.9 | 13.3 | 12.7 | 1.25 | 15.3 | Cambria Global Value / GVAL* | Foreign Large Value | 104 | 35.3 | 15.7 | 11 | N/A | 0.68 | 16.2 | Cambria Shareholder Yield / SYLD* | Mid-Cap Value | 98 | 20.5 | 8.2 | 13 | N/A | 0.59 | 19.2 | Davis Select US Equity / DUSA | Large Value | 28 | 15.1 | 11.6 | N/A | N/A | 0.59 | 16.9 | GMO Quality VI / GQLOX | Large Blend | 47 | 18.5 | 13.4 | 16.1 | 15.5 | 0.42 | 15.0 | GMO U.S. Quality / QLTY | Large Blend | 43 | 20.3 | N/A | N/A | N/A | 0.50 | N/A | JPMorgan Equity Focus / JPEF | Large Blend | 40 | 10.9 | 13.1 | 15.4 | 15.7 | 0.44 | 15.4 | Paradigm Select / PFSLX* | Mid-Cap Blend | 50 | 62.4 | 14.6 | 16.3 | 15.1 | 1.26 | 23.7 | PGIM Jennison Focused Value / PJIAX | Large Value | 35 | 26.9 | 14.4 | 11.9 | 12.5 | 1.10 | 14.8 | PGIM Jennison Focused Value ETF/ PJFV | Large Value | 35 | 27.7 | N/A | N/A | N/A | 0.33 | N/A | Putnam Focused Large Cap Value / PVAL | Large Value | 45 | 25.9 | 16.7 | N/A | N/A | 0.55 | 14.9 | ---
Index Funds | Fund / Ticker | Morningstar Category | No. of Stock Holdings | 1-Yr Return | 5-Yr Return | 10-Yr Return | 15-Yr Return | Expense Ratio | 5-Yr Volatility | Invesco Russell 1000 Equal Weight / EQAL | Mid-Cap Blend | 1,011 | 13.2% | 6.9% | 10.1% | N/A | 0.20% | 16.4 | Vanguard S&P 500 / VOO | Large Blend | 500 | 17.0 | 13.6 | 15.3 | 15.5 | 0.03 | 15.8 | Note: \*With the cheapest stocks or more volatile small-cap stocks, it's best to own ETFs that have more holdings. Returns are through Sept. 28. Five-, 10-, and 15-year returns are annualized. Volatility is a measure of standard deviation. N/A=not applicable Source: Morningstar Direct
market is misunderstood. “Capital One is the original and most successful fintech company,” he says. “It was started as a data science company and is run by data scientists. It’s in the top 10 of all companies for holders of AI patents and machine learning patents.”
Such a technological edge makes it a better credit-card lender than competitors, Davis argues. “Financial services companies are basically in the business of pricing risk,” he says. “The better you use information and data, the better you can price risk.”
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Small-Caps
The greater the real or perceived risk in a company, the more volatile the returns. Some might argue that for cheaply valued companies with some warts, it's better not to be so concentrated. Meb Faber typically holds 100 stocks in his deep-value ETFs Cambria Shareholder Yield and Cambria Global Value, which have been strong but volatile long-term performers. He argues that his ETFs differ greatly from most large-cap U.S. stock funds by holding smaller, cheaper, and often foreign companies.
“If you’re going to charge more than zero, you’d better be concentrated in different stocks,” he says. But holding 20 stocks in his style would “introduce a ton of variability” in returns.
Value stocks tend to have smaller capitalizations than growth ones because they have been beaten up. But any small stock can prove too volatile for extremely concentrated portfolios. Morningstar categorizes Paradigm Select as a mid-cap blend fund, but it has almost half of its 50-stock portfolio in small and microcap stocks. “I don’t want to be overconcentrated,” says Amelia Weir, who co-manages the fund with her mother, Candace Weir. “Sometimes you have to let your winners run, but I’d say 50 to 60 stocks” is ideal.
In a perfect world, no single position would get above 5%, Weir says. But one reason the fund is in the mid-cap range now is that its AI-related stocks like Lumentum Holdings and Marvell Technology have done so well, up 473% and 203%, respectively, in the past year. Lumentum is now almost 8% of the fund.
Therein lies the conundrum for a concentrated fund manager: You don't want to own too much in a volatile stock, but you never know if you might own the next Amazon. B
FUNDS QUARTERLY
Bitcoin Funds Battered Bond Funds in the Third Quarter
Rising interest rates pummeled fixed income as stocks continued to chug along, and favorable rule-making buoyed cryptocurrencies.
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BY LEWIS BRAHAM
R itcoin funds won the third quarter, and bond funds lost—even as stocks kept going up.
Bonds are a portfolio's ballast, but their bête noire is rising interest rates,
which have surged because of inflation from the Iran war and years of deficit spending. The \$399 billion Vanguard Total Bond Market exchange-traded fund fell 3.4% in the quarter, just edging out the 3.5% average fund loss in Morningstar's intermediate core bond category. High rates and inflation are usually bad for stocks, too, although the S&P 500 index was up 2.3%.
Inflation at 3.4% isn't as bad as it was in 2022, yet the 10-year Treasury note yield recently crossed 5%, a level it hasn't seen since 2007. Meanwhile, 30-year mortgage debt rates have topped 7%, a rate which hasn't been typical since the 1990s, other than a few blips. Maybe the 1990s' dot-com bubble is instructive—high rates alone didn't stop that stock market freight train, either. Earnings misses, accounting scandals, a terrorist attack, and bankruptcies did.
Still, mortgage debt issuers with high credit quality are guaranteeing an annual return of 7%, and existing bonds that were issued at lower rates in the past are being sold off. The average fund in Morningstar's government mortgage-backed bond category fell 4% in the quarter, and the iShares MBS ETF lost 4.2%. Meanwhile, long-term bond funds, which are the most sensitive to rates, fell 6.9%. Interestingly, tax-free municipal bond funds fell more than traditional ones, in part because of excessive issuance.
Despite the poor performance, investors continued to add new money to bond funds in July and August,
especially the intermediate core category, which saw \$26.6 billion in new inflows, and the Vanguard Total Bond Market fund, which took in \$5.8 billion. (September asset-flow numbers weren't yet available.)
After a strong first half of 2026, small-cap funds of every category fell in the third quarter, the worst being small growth funds, down 9.6% on average. Small companies are more dependent on debt financing to grow, so rising rates hurt them more than large, well-established companies. The largest small-cap ETF, the \$103 billion iShares Core S&P Small-Cap, de-
---
Big Winners and Losers
clined 8% in the quarter after surging almost 20% in the previous one.
The worst-performing fund category in the quarter was utilities, down 11.6% on average. That's understandable, as utilities have bondlike dividend yields. But utilities are also the backbone of the artificial-intelligence data-center buildout, which requires massive amounts of energy. Virtus Reaves Utilities, which has an AI focus, had a bad quarter, down 13.9%. This could be either a buying opportunity for this fund or a warning sign for AI generally, depending on one's outlook.
There are also some interesting shifts in market leadership. While the average large blend fund was up 1%, and large growth, 1.2%, tech stock funds were down 2%, and healthcare ones were up 4.4%. Though the average large blend fund has a hefty 35% tech weighting, it also has 10% in healthcare stocks.
After years of being dead money, Big Pharma stocks like Merck and Johnson & Johnson came back strongly in the quarter. Merck was up 13.7% because of promising results for a new cancer vaccine that it partnered
The third quarter was bad for bonds and small-caps, but good for cryptocurrency, oil, and healthcare funds. | Fund / Ticker | Morningstar Category | Fund Assets (billion) | 3rd Quarter Return | YTD Return | Expense Ratio | Vanguard Total Bond Market / BND | Intermediate Core Bond | $399 | -3.4% | -2.8% | 0.03% | PIMCO Income / PONAX | Multisector Bond | 232 | -2.8 | -0.4 | 0.91 | Vanguard Information Technology Index / VGT | Technology | 171 | 5.2 | 33.8 | 0.09 | SPDR Gold Trust / GLD | Commodities Focused | 142 | 3.6 | -3.3 | 0.40 | Dodge & Cox Income / DODIX | Intermediate Core-Plus Bond | 110 | -4.2 | -3.4 | 0.41 | iShares Core S&P Small-Cap / IJR | Small Blend | 103 | -8.0 | 14.1 | 0.06 | Vanguard Intermediate-Term Tax-Exempt / VWITX | Muni National Interm | 89 | -5.1 | -3.4 | 0.17 | iShares Bitcoin Trust / IBIT | Digital Assets | 67 | 42.8 | -4.3 | 0.25 | iShares 20+ Year Treasury Bond / TLT | Long Government | 46 | -8.9 | -8.0 | 0.15 | State Street Health Care Select Sector SPDR / XLV | Health | 44 | 6.4 | 10.1 | 0.08 | State Street Energy Select Sector SPDR / XLE | Equity Energy | 40 | 16.3 | 40.1 | 0.08 | iShares MBS / MBB | Government Mortgage-Backed Bond | 36 | -4.2 | -3.3 | 0.04 | American Funds American High-Income / AHITX | High Yield Bond | 29 | -2.3 | -0.2 | 0.74 | VanEck Gold Miners / GDX | Equity Precious Metals | 27 | 16.5 | 2.1 | 0.51 | United States Oil Fund / USO | Commodities Focused | 2 | 37.9 | 110.5 | 0.86 | Virtus Reaves Utilities / UTES | Utilities | 1 | -13.9 | -10.1 | 0.49 | Breakwave Tanker Shipping / BWET | Commodities Focused | 0.2 | 423.1 | 4,000.6 | 3.50 | Note: Returns are through Sept. 30.
Source: Morningstar
with Moderna to develop. The share price for Moderna, which collapsed after Covid ended and more recently because of the current political administration's hostility toward mRNA vaccines, soared 175%.
This shift hasn't gone unnoticed. During the quarter's first two months, healthcare funds received \$3.8 billion in new investor money, reversing a negative trend in 2026. Though strong for the year, tech funds actually saw \$3.1 billion in outflows in August.
Yet the biggest winners by far were funds that invest in cryptocurrencies like Bitcoin. The \$67 billion iShares Bitcoin
Trust ETF was up 42.8%. The digital-assets fund category overall has behaved like a yo-yo this year, with the iShares ETF still down 4.3%. Despite the failure of the crypto-friendly Clarity Act to pass, crypto still rallied because President Donald Trump-aligned regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission stepped in with their own crypto-positive rule making. The fact that the Trump family has financial interests tied up with crypto doesn't hurt.
Also strong were commodities, particularly anything energy-related, because of the Iran war. The \$1.7 billion United States Oil fund, which invests in oil futures, was up 37.9% in the quarter and has surged 111% so far this year, with oil having recently crossed \$100 a barrel. The \$40 billion State Street Energy Select Sector SPDR ETF, which has 24% of its portfolio invested in ExxonMobil, gained 16.3%. Diversified commodities broad-basket funds gained 14.6% on average.
Continuing its crazy run, the \$190 million Breakwave Tanker Shipping ETF was the best-performing fund in the third quarter, surging 423% and up 4,001% for the year. It's the closest thing to a direct bet on the Iran war continuing as it invests in derivatives on crude-oil tanker freight rates. Since the Strait of Hormuz became perilous to navigate, freight rates have exploded.
Although they started the quarter strong, gold bullion and gold miner stock funds gave back some of their gains toward the end as the dollar strengthened on rising interest rates and amid an increased appetite for higher-yielding U.S. bonds. Investors may be on to something. B
THE ECONOMY
Consumer sentiment surveys paint a bleak picture right now, but spending remains brisk. Perhaps the problem lies with the surveys.
If Consumers Are So Down, Why Are They Spending So Freely?
When the going gets glum, the glum go shopping. That seems to be
the way of many Americans these days. Leading surveys of their moods show them to be down in the dumps about either the economy or their own financial conditions. But that hasn't stopped them from spending—far from it, in fact.
For months, the releases on the University of Michigan's consumer sentiment survey and the Conference Board's polling on consumer confidence have been drearily similar. The September UMich survey found the second-lowest reading in the polling's history, going back to 1952. The Conference Board's data, released this past Tuesday, was also downbeat, even lower than during the pandemic in 2020 and the worst since 2014.
Yet other news this past week showed that Americans' spending has remained robust despite their sour mood. Personal spending was much stronger than expected in August, the Commerce Department reported, vaulting some $0.9\%$ .
The final release of second-quarter gross domestic product showed an upward revision to a 2.2% inflation-adjusted annual rate of growth, up from 1.5% previously reported. That mainly reflected a revised gain in personal spending, to 3.8% from 3.2%. Overall GDP growth was held down by spending for imports and a drawdown in inventories. Stripping away those factors, domestic final sales grew at a robust real 3.9% annualized, a substantial acceleration from the preceding two quarters' 2.4% and 0.5%, respectively.
BY RANDALL
W. FORSYTH
The easy answer to the disconnect between downbeat sentiment and robust spending is the so-called K-shaped economy. The vast disparity among Americans' incomes and wealth ought to end the dopey statements by TV talking heads about “the consumer” (but probably won’t). A widely cited study last year by Moody’s Analytics found that the highest-earning 10% of households accounted for nearly 50% of total spending.
Those wealthy cohorts also have the most assets, such as stocks and residential real estate, the appreciation of which has further supported their ability to spend. The top 10% of
U.S. households gained \$38.2 trillion in wealth in the year ended on June 30, according to recently released Federal Reserve data, as the S&P 500 index rose 21% over that span.
But that doesn't fully explain growth in spending. A report by Bank of America economists Shruti Mishra and Aditya Bhave released this past week found increased breadth in consumption, with a narrowing in “K-shaped spending dynamics” combined with a pickup in spending among less well-off households. That's based on the bank's aggregated credit-and debit-card numbers. They estimate that third-quarter spending grew at close to a 3.5% real pace, nearly matching the previous quarter's showing.
The BofA economists found that surging equity wealth pushed household assets to more than 10 times their liabilities, which they said provided a “continued tailwind for spending.” Those gains weren’t just in rich folk’s stock portfolios. Liquid assets such as bank deposits and money-market funds, which are probably more evenly distribution across the population, also are elevated versus liabilities. The economists warned, however, that a shakeout in artificial-intelligence stocks, higher long-term interest rates, or a more significant oil-price shock could pose a potential risk to spending.
That we're less happy than we used to be probably qualifies as a “No s—, Sherlock” observation. But these consumer surveys still are followed as indicators of future spending. Indeed, average consumer expectations for business conditions are one of the components of the Conference Board's Leading Economic Index, along with redoubtable measures such as new orders, building permits, and financial conditions.
The problem is, feelings don't matter much anymore, at least not as indicators of the economy. B
■ Conference Board Consumer Confidence Index
■ University of Michigan Consumer Sentiment Index
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Downbeat Sentiment, Upbeat Spending
Note: seasonally adjusted annual rate in 2017 dollars.
Consumer Spending (trillion)
Widely followed surveys show that consumer attitudes have been depressed despite a good economy and stock market. That hasn't slowed down spending.
So, what really explains the evident split between the consumers' moods and their spending? Part of the answer may lie in the survey methods. Piper Sandler's economics team, led by Nancy Lazar, contends that its proprietary survey, which polls 500 different people nightly, versus 3,000 a month by the Conference Board and UMich's 1,000 a month, tracks historical spending better than those surveys. Recently, the Piper Sandler polling has shown people to be more upbeat and in sync with their spending than in the other surveys.
More broadly, the big economic sentiment indicators may have become unmoored from the actual economy. After all, they've been falling even with low unemployment, solid growth, and a record stock market. According to a recent report by Goldman Sachs economist Joseph Briggs and Sarah Dong, people's happiness deteriorated sharply in 2020 and hasn't recovered in tandem with the economy and the stock market. And that extends across all cohorts and political partisans, and among homeowners and renters alike.
Citing a paper from University of Chicago economist Sam Peltzman, the Goldman report said people have become more downbeat on the state of the world for reasons unrelated to the economy. That paper found that a decline in confidence in nearly all societal and government institutions since 2016 more than offset an improvement in finances. The sentiment surveys may reflect that general decline more than shifting views about the economy. Reps for the Conference Board and UMich surveys couldn't be reached.
Sources: Bloomberg, Bureau of Economic Analysis
Coke, Mondelez, And Other Staples Bargains
BY EVIE LIU
The S&P 500 Consumer Staples stock index has returned more than 7% year to date, well ahead of its 3.9% gain for all of 2025. But the recovery has been wildly uneven.
Target shares have surged 60% this year, and Coca-Cola has gained 24%. Meanwhile, Cheerios maker General Mills and Campbell's, known for its canned soup, have both fallen about 27%.
The divergence creates opportunities for stockpickers like Ben Shuleva, consumer-sector leader at Fidelity Investments and co-manager of the Fidelity Select Consumer Discretionary Portfolio and Fidelity Select Consumer Staples Portfolio, with combined assets of about \$2 billion. Shuleva has managed the Consumer Staples fund since 2020. It returned 14.5% in the first eight months of 2026, outperforming the 9.9% gain in its sector benchmark, the MSCI US IMI Consumer Staples 25/50 Index.
Barron's spoke with Shuleva on Sept. 25 about how consumer spending trends, GLP-1 drugs, commodity inflation, and artificial intelligence are affecting staples stocks, and which names he finds most attractive. An edited version of the conversation follows.
Barron's: Consumer-staples stocks have been struggling. What could brighten this picture?
Ben Shuleva: The backdrop for staples is challenging. Unlike discretionary categories that can rely on the top 10% of consumers to spend and drive the business, the top 10% and bottom 10% of consumers generally use the same amount of toilet paper. So, the staples companies really need broad consumer health, and that isn't something we have today. But this doesn't mean there aren't opportunities in the sector.
We should think of staples as a seat belt: The best relative environment for staples is always a terrible environment elsewhere. Today's broader market is unusual in how narrow it is—both in market cap and what is driving the economic growth. So much is dependent on artificial intelligence. If any of the fears we have for the AI trade turn into real, concrete challenges, you would expect a flight to safety, and staples would benefit.
How will staples companies deal with elevated energy costs and commodity inflation?
Staples companies buy commodities and sell brands to capture the spread in between. Given persistent inflation, the cost side of the equation has gotten much worse, and companies will have to raise prices to manage margins. But consumers have been eating higher inflation for five to six years and volumes are already weak, so it's going to be challenging.
The industry will need more so-
Photograph by ALEX GAGNE
“[Coca-Cola] stock is up, but it still trades at a pretty big discount to some of the other best-in-class consumer companies.”
phisticated price-pack architecture to manage demand elasticity, which means keeping the same price points but offering smaller pack size. Many companies are already doing it. If oil stays at this level, many companies will have to make harder decisions over the next 12 to 18 months—decisions like rationalizing production capacity and closing plants—to improve productivity.
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How is AI disrupting consumer companies?
On the one hand, barriers to entry are coming down. AI can help new entrants go to market faster, with smarter and better content. On the other, leading companies use AI to bring innovation faster and save money.
We need to approach the question of AI's impact with humility and acknowledge that the outcome we predict today is highly uncertain. Twelve months ago, OpenAI launched instant checkout for ChatGPT and announced partnerships with retailers such as Walmart and Shopify. At the time, this was expected to catalyze AI disruption of retail. Just six months later, OpenAI said it would allow merchants to use their own checkout.
The risk I see is a change in how consumers discover products. When you shop on a retailer's website, you're shown sponsored products, recommendations, and advertisements throughout the purchasing process. Retailers monetize that activity at every stage.
When that product discovery occurs off-site or via an AI agent, the retailer doesn't engage directly with consumers and generate first-party data. Instead, it acts primarily as a fulfillment mechanism, and the funnel—be it ChatGPT, Claude, or Muse—is more in control of the higher-value piece of that transaction.
Without advertising, the e-commerce model doesn't really work. Even at Amazon.com, the majority of retail operating profit comes from advertising.
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Could the use of GLP-1 weight-loss treatments hurt food-and-beverage demand long term? I have described the potential disruption from GLP-1s as both big and
small. The percentage of GLP-1 users is about 10% of the U.S. adult population, and it is growing as lower-priced options have become available. But the impact on food-and-beverage companies is probably less than we think. If we assume another 25 million Americans start taking GLP-1 drugs over the next five years and each reduces calorie consumption by 20%, that would translate into roughly a 30-basis-point annual drag on total U.S. calorie consumption. [A basis point is a hundredth of a percentage point.]
You have been fairly bullish on the beverage industry. Does the industry have a structural advantage over other staples markets? Consumer brands are living in an age of disruption. The barrier to entry has come down. New forms of advertising allow brands to target a hyper-specific segment of consumers with high conversion rates and direct feedback, while e-commerce eliminated the space constraints of bricks-and-mortar retail that favored large incumbents. This has been fueling the growth of many emerging brands.
E-commerce works well for lightweight products at a high price point. It is hard to make the model work for things that are bulky and heavy. Beverages are harder to manufacture [than packaged food], and distribution is a significant barrier to entry. It is much easier to get a snack on shelves at Walmart than have a cold beverage in a fridge at every 7-Eleven across the country. There are only three major national soft-drink distribution systems in the U.S.: Coca-Cola, PepsiCo, and Keurig Dr Pepper.
Coca-Cola and Keurig Dr Pepper are both top holdings in your fund. What makes them attractive? Coke is still robust. It's one of the highest-quality consumer companies in the world. It's winning in durable ways in a very advantaged category. The distribution advantage of Coke is even greater internationally. Just as an example, I climbed Mount Everest in 2022. On the hike up to base camp, you pass these local tea houses, and every tea house sold Coke and Sprite. The stock is up
[Coca-Cola shares rose more than 30% in the past year], but it still trades at a pretty big discount to some of the other best-in-class consumer companies such as Walmart, Costco Wholesale, and Marriott International. [Coke trades for 25 times the next 12 months' expected earnings.]
Keurig Dr Pepper is a more complex story. The company completed its acquisition of JDE Peet's in April, and is using that purchase to create a beefed-up coffee business that will be spun out in early 2027. There is a lot of deal-related complexity with that pending transaction, which makes it hard for investors to understand the business and price the stock. But that means opportunity. The stock has an attractive valuation, and there is an identifiable catalyst on the horizon. [Keurig Dr Pepper is trading for about 13 times forward earnings.]
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Constellation Brands and Diageo have suffered from a decline in alcohol sales. What is the investment outlook now?
This year has been another disappointment. Expectations were high going into the year because poor weather and weak demand from lower-income and Hispanic consumers had hurt sales in 2025, setting a relatively easy bar for year-over-year growth. We also had the World Cup and America's 250th birthday this year. The hope was they would drive an inflection in alcohol volumes, but that hasn't happened.
Some of the structural headwinds are here to stay, and alcohol companies need to adapt. Diageo just hired a new CEO, and recently announced steps to cut costs and get lean. It is using the savings to reinvest in both the brands and price points.
Constellation has continued to gain market share in U.S. beer. It also has a new CEO, and I'm eager to see how he approaches this new reality in alcohol.
---
You have cited the structural challenges facing the packaged-food industry. Yet, Mondelez International has been a top holding. What separates it from peers? Mondelez competes in more-indul-
gence-based categories such as chocolates and cookies, where brands and taste matter more to consumers and the barriers of entry are higher. When people want a chocolate cookie with cream inside, they buy Oreos. That's why private labels are far less penetrated in these categories than in the rest of packaged food.
Also, Mondelez has a lot of emerging market exposure. It isn't exposed only to slowing U.S. population growth and shrinking per-person calorie intake. The company has a huge business in India, the rest of Asia, and Latin America—all faster-growing markets than the U.S.
Mondelez has a lot of exposure to cocoa prices, which nearly quintupled from their 2022 lows to an early-2025 peak. That squeezed the company's margins and hurt its volumes. But high prices have been destroying demand and incentivizing supply, and cocoa prices are already down.
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Target is another of your top holdings. Is the retailer's turnaround working?
Retail sales growth has become increasingly concentrated among a handful of major players, including Walmart, Costco, and Amazon. But there is still plenty of room to carve out a niche in retail if you know what sets you apart and execute well.
Target made several mistakes in the past three years and drifted away from what it did best. Recently, the company made some material changes to its management team. Target refocused its strategy, and there are early signs of success. Same-store sales have inflected hard lines. The toy business is growing by double digits. Target is pushing hard into beauty. The retailer is crushing it in niche categories like trading cards and has set up partnerships with viral brands such as Roller Rabbit and Pokémon.
The company is starting to find its magic. The stock has moved up in the past year, but the company is only two quarters into the turnaround, and sales and margins are still depressed relative to history.
Thanks, Ben. B
TECH TRADER
Semiconductor maker Micron Technology isn't receiving the support from investors it deserves following another stellar quarter.
Micron's Stock Is Cheap. Why Investors Are Still Gun-Shy.
n Wednesday, memory-maker Micron Technology reported another beat-and-raise quarter, with 379%
sales growth and an astounding 87% gross margin. But the stock went down initially before rising 3%.
Come Thursday morning, my inbox was full of questions that all boiled down to, “What gives with this stock?”
Micron stock is trading at only 6.4 times its projected earnings this fiscal year, which began a month ago, well below either the S&P 500 or PHLX/semiconductor, or SOX, indexes. It is particularly strange when held up against the Wall Street analyst consensus estimate for earnings growth of 126% in fiscal 2027.
More than any other tech stock, trading in Micron is about psychology, and all the abnormally large numbers in the world can't overturn some long-held beliefs. The stock has become a battleground between “this time is different” and “no, it isn’t.”
Single-digit forward price/earnings ratios are nothing new for Micron. Over the past 10 years, 54% of days saw its P/E under 10, and 27% were lower than today.
It all stems from the commoditized nature of the memory business. There have been wild swings in inventories and prices, which get reflected in Micron's financials as sharp fluctuations in sales growth and gross margins.
Micron has been subject to a phenomena known as the bullwhip effect.
BY ADAM
LEVINE
First identified by Massachusetts Institute of Technology business school professor Jay Forrester in 1961, the bull- whip effect is that the further upstream a supplier is from the end-user sale, the less visibility it has into demand, and the wider the oscillations are in inventories and, consequently, prices.
During the last cycle—from 2019 to 2023—most of Micron's sales were to consumer-electronics and vehicle manufacturers. These products go through multiple distribution layers after the memory leaves Micron's warehouses, and the demand signals get more opaque with each step.
In the last go-round, the inventory situation was further complicated by the supply-chain chaos and fierce
consumer goods demand during the Covid pandemic lockdowns. When that demand flagged, it was just as new memory manufacturing capacity was ramping up.
Inventories at Micron and its customers shot up, and prices collapsed. With sales contracting and inventory write-downs piling up, Micron had a negative gross margin in all the calendar-2023 quarters.
The stock peaked in early 2022, just a few weeks after Micron reported its first fiscal quarter of that year, which saw slight declines in sales growth and gross margin. Micron's forward P/E was 9.7 that day, not much higher than it is today. The S&P and SOX indexes both had P/Es that were more than double Micron's, the same as today. Even in the cyclical chip business, Micron and the other memory makers are a special case.
The old Wall Street maxim played out: The best time to buy cyclical chip stocks is when things go from horribly bleak to merely awful, and the best time to sell is when growth and margins are peaking. Many tech investors still feel pangs of regret from a cycle they mistimed, and have either sworn off the stock or are ready to jump ship at any sign of a cycle peak.
For those so inclined, they got that
Many tech investors still feel regret from a cycle they mis-timed, and have either sworn off the stock or are ready to jump ship at any sign of a cycle peak.
signal with Micron's guidance for the first quarter, with projected slight declines in earnings growth and gross margin. Déjà vu all over again.
But a lot has changed in the memory market since that last cycle. Memory is still a commodity product, but it is also one of the key chokepoints in the generational investments into AI data centers, which show no signs of slowing down.
Micron and its peers—SK Hynix and Samsung Electronics—were initially reluctant to invest new capital to meet data-center demand, and new manufacturing capacity isn't expected to begin providing supply-side relief until the middle of next year, with more slated for the following years.
Instead of riding fickle consumer demand, now data-center customers predominate, representing 63% of sales in the fourth quarter, rising from about a quarter of revenue in the last upcycle. There are fewer layers of distribution between Micron and the end customer in this market, and Micron has better demand signals. In this week's earnings call, CEO Sanjay Mehrotra said that fiscal 2027 would have an even tighter market for memory than 2026, with more price increases, and that the following year would be tighter still. "We do not have a line of sight to when supply and demand will get in balance," he said.
The stock was unmoved by that declaration. Micron has its best visibility ever into what long-term demand looks like. Like its competitors, Micron is using the extraordinary market power it has to push customers into five-year agreements with price floors and high price ceilings, and take-or-pay terms. Micron now has 26 of these contracts which constitute over a third of sales through 2030. The more it can add to that, the softer an eventual downcycle will be.
And that may be what it takes to convince some investors that Micron is worth more than a single-digit valuation multiple: a downcycle in which the average sales price doesn't collapse, revenue doesn't crater, and gross margins bottom at respectable levels. If Mehrotra is right, that may be years off. B
MARKET WEEK
September 28 through October 2, 2026 | International Trader | P. 32 | Striking Price | P. 33 | Inside Scoop | P. 34 | 13D Filings | P. 34 | Winners & Losers | P. 35 | Market View | P. 36 | Statistics | P. 37 | ---
MARKET PERFORMANCE DASHBOARD
Dow Jones Industrials
51,176.96
52-wk: +9.45% YTD: +6.48% Wkly: -1.26%
S&P 500
7722.72
52-wk: +14.99% YTD: +12.81% Wkly: -0.27%
Nasdaq Composite
27,190.86
52-wk: +19.36% YTD: +16.99% Wkly: +0.45%
Micron Technology
\$1,074.89
52-wk: +472.27% YTD: +276.61% Wkly: -0.68%
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THE TRADER
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The Market Looks Ahead to Earnings Season
et out your trust
rope and harness.
Investors are once
again climbing the
proverbial wall of
worry—and earn-
ings season could
provide the piton that supports the stock market's next move higher.
By PAUL R.
LA MONICA
Really, the stock market shouldn't be holding up as well as it is. Oil prices remain persistently high, bond yields keep rising, and the Federal Reserve's next interest-rate hike remains a question of when, not if.
And yet the Nasdaq Composite gained 0.5% this past week, while the S&P 500 index dipped 0.3%. Only the Dow Jones Industrial Average, off 1.3%, suffered a healthy drop.
The market found reasons to hold up amid the economic data. A weaker-than-expected September jobs report, particularly slowing wage growth, helped soothe some investor concerns about inflation and interest rates, as the chance of the Fed raising rates in October and December tumbled on Friday. But optimism about corporate profits is lifting Wall Street's mood, too.
“We’re clearly in a higher inflationary environment,” says Marc Pinto, head of Americas Equities at Janus Henderson. “So, the question people have to wrestle with is, ‘What do we need for stocks to keep moving higher?’ The answer is earnings growth.”
So far, so good. Earnings might hold the answer for the stock market's remarkable resilience. Micron Technology's blockbuster report on Sept. 30 gave the market a glimpse of what is yet to come. The memory chip leader's results on guidance are a sign that spending on artificial intelligence is continuing at a robust pace. Investors will get a further glimpse at how companies fared in the third quarter this coming week, when Constellation Brands, Levi Strauss, PepsiCo, and Delta Air Lines release results. The market will be keeping an eye on these companies for clues about whether consumers continue to spend despite all of the pressure from rates and oil.
Earnings guidance will be key. Earnings for the S&P 500 index are currently expected to rise more than 25% in the fourth quarter, and 2027 earnings are forecast to increase 16%
BARRON'S ADVISOR
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Special quarterly listings in WSJ & Barron's from 2026 levels, a slowdown from this year's estimates of more than 30% profit growth but still impressive. Joshua Wein, a portfolio manager at Hennessy Funds, said it's “hard to imagine earnings falling off a cliff in the fourth quarter and 2027.”
And it may be Big Tech's turn to shine. Of the Magnificent Seven, just three names—Apple, Meta Platforms, and Nvidia—have risen more than 10% this year. Tesla, meanwhile, has dropped, while Alphabet, Microsoft, and Amazon.com have posted single-digit gains. That has resulted in a group that now looks cheaper than it did at the start of the year: The Roundhill Magnificent Seven exchange-traded fund trades at 25 times earnings forecasts for the next 12 months, down from 32 times at the start of the year.
“We're overweight in large-caps and the megacaps, in particular,” says Todd Jablonski, global head of multi-asset and quant strategies at Principal Asset Management. “It's about minimizing volatility.”
So, leave the worrying to the other guy and enjoy the climb.
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The Next Crypto Boom
Do we call it a comeback? Cryptocurrencies enjoyed a renaissance in the third quarter. Bitcoin soared more than 40%, while Ethereum surged more than 70%. The rebound for digital assets may have only just begun.
Even after their stellar summer performance, Bitcoin and Ethereum prices both remain lower for the year. Citigroup research strategist Alex Saunders doesn't expect that to last much longer. He raised his base case 12-month price targets at the end of September to \$113,000 for Bitcoin, nearly 35% higher than its current level, and \$3,028 for Ethereum, more than 13% above where it's now trading.
His rationale? The increased pace of Treasury bond buybacks in recent months could eventually lead to lower long-term interest
rates and a weakening of the dollar, even though yields and the greenback have continued to march higher. Cryptos tend to benefit from the currency debasement trade.
Saunders also argues that the Securities and Exchange Commission's decision to step up with some favorable rules for cryptos in the wake of the Senate's failure to advance the crypto-friendly Clarity Act should give digital assets a further boost. “Durable legislation would likely offer greater policy clarity than agency-led rule-making, but the industry has taken the view to build now... and to create entrenchment that would be difficult to dismantle,” he wrote.
Retail investors are also taking advantage of the crypto resurgence to buy crypto ETFs as well as stocks with exposure to the Bitcoin boom. According to data from Coin-MarketCap Research, U.S. spot Bitcoin ETFs posted eight consecutive sessions of net inflows at the end of September. That has helped boost iShares Bitcoin Trust, Fidelity Wise Origin Bitcoin, Grayscale Ethereum Staking, and other funds.
Meanwhile, shares of top brokerage firm Coinbase Global are up 11% in the past three months, while Michael Saylor's Strategy has skyrocketed nearly 60% since early July as the company has resumed purchases of Bitcoin in recent weeks.
The rally in Bitcoin and crypto stocks has coincided with a “risk on” rally that has lifted the Magnificent Seven, cybersecurity stocks, and other tech names in the past few months, noted Jeff Weniger, chief investment strategist at Corgi Invest. Coinbase is the largest holding in the firm’s newly launched Corgi Crypto Infrastructure ETF. The fund also has positions in Robinhood Markets, Bitcoin miners BitMine Immersion Technologies and Hut 8, and stablecoin issuer Circle Internet Group.
“Bitcoin and other pieces of the crypto atmosphere turned on a dime over the summer and went vertical,” Weniger said.
Performance of the Dow Jones U.S. Industrials, ranked by weekly percent change.\*
Source: S&P Dow Jones Indices
ebullient mood for crypto could once again sour. But given that Bitcoin and stocks in the digital asset universe have rallied despite higher interest rates and a big legislative setback, it's hard to bet against that short-term momentum. The Bitcoin bulls have once again taken charge.
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A Memory ETF Gets a Boost
Micron, one of the world's leading memory chip makers and a poster child for the artificial-intelligence stock rally, reported earnings on Wednesday afternoon that topped forecasts. That should be good news for the Roundhill Memory ETF, one of the most successful ETF launches of all time.
The ETF, which traders often refer to by its ticker symbol DRAM, has come far since its early April debut, attracting \$26.6 billion in assets under management in its first six months. But the risks are high for the popular fund—thanks to its high concentration in Micron and a few other volatile stocks, questions about AI demand, and the growing number of competing funds.
Micron is the actively managed fund's largest holding, with a more than $26\%$ weighting, while South Korean rivals Samsung Electronics and SK Hynix make up the second- and third-largest positions. Combined, these three stocks account for nearly three-quarters of the fund's assets. That means there was a lot riding on Micron's results for the ETF.
DRAM's price has more than doubled since it launched, but is still nearly $25\%$ below its all-time high from June. That makes the fund even more volatile than the broader iShares Semiconductor ETF, or SOXX, which has Micron as its third-largest holding. The SOXX is about $10\%$ below its 52-week high.
Dave Mazza, CEO of Roundhill Investments, told Barron's that he isn't concerned about the big swings in memory stocks.
“Memory remains a compelling opportunity from a valuation standpoint,” Mazza said. “And while volatility comes with the territory, the flows we’ve seen during pullbacks suggest investors are treating them as entry points.”
He has a point on valuation. The DRAM ETF currently trades for just five times earnings estimates for the next 12 months, down from a peak valuation of 10 times earnings in June. This is also a much lower multiple than that of the S&P 500, which trades at 19 times earnings estimates.
Still, Micron and other memory chip companies have historically been highly cyclical. They often look cheap near a top—when they are in boom times and generating strong earnings. The question is how much longer this robust growth can last.
That's a question facing investors in several copycat memory ETFs that have launched since then, too, such as Tuttle Capital Concentrated Memory Stack, Kurv Memory Select, and Tema Memory. The Tuttle fund focuses more on picks-and-shovels plays that benefit from rising capital expenditure related to AI, such as chip and testing equipment companies and infrastructure firms like Advantest, Onto Innovation, and Penguin Solutions. The Kurv ETF leans heavily on the South Korean leaders, with more than $20\%$ of its assets in SK Hynix and another $7\%$ in Samsung. The Tema ETF has flash-memory company Sandisk, SK Hynix, and Japan's Kioxia Holdings as its top three holdings, which collectively make up a little more than half of its assets.
These smaller memory-focused ETFs could get a big lift if Micron's stock resumes its explosive rally and the rest of the tech sector follows suit. But so would DRAM.
The strong results from Micron could be the catalyst to reignite the memory chip rally and get DRAM back on track. B
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INTERNATIONAL TRADER
Argentina's Bonds Are Worth Another Look
BY CRAIG MELLOW
74 cents over the past two months.
Argentine President Javier Milei is losing momentum a year before his bid for re-election. Luckily for him and bondholders, his Peronist opponents are stuck in reverse.
The libertarian firebrand, in office since December 2023, achieved global celebrity as his shock therapy whipped near-hyper-inflation and doubled currency reserves in the world's most-defaulting nation. But he has largely squandered a political boost he got from successful 2025 midterm elections.
At home, Milei's drawn-out defense of cabinet chief Manuel Adorni against corruption allegations left vital structural reforms of taxation and pensions to languish. "The Adorni scandal consumed way too much oxygen," says Bruno Binetti, a fellow at Chatham House. Adorni stepped down in late June.
Abroad, Milei's administration whiffed on a chance to re-enter bond markets before the summer surge in global yields. "If they didn't want to issue at 9%, they won't come to market now at 11%," says Jeff Grills, head of emerging markets debt at Aegon Asset Management.
That has left the economy to drift in the wrong direction for most of Argentina's 46 million citizens. Inflation is stuck around a still-punishing $30\%$ annual rate. Poverty is increasing again after a sharp contraction in Milei's first two years.
This year's $2\%$ to $3\%$ economic growth is concentrated where jobs aren't, in oil and mining exploration and agriculture. "Real wages are stagnant, and unemployment is rising," summarizes Thierry Larose, portfolio manager for emerging markets local debt at Vontobel Asset Management.
Milei's poll numbers have dropped accordingly, with voters disapproving of his stewardship by a 60-to-40 margin, according to pollster AtlasIntel. So have bond prices. Benchmark paper maturing in 2038 fell from 83 cents on the dollar to
Argentines may well see the alternative as worse when they cast ballots in October 2027, though. Peronism's leading lights, former President Cristina Kirchner and Buenos Aires Province Gov. Axel Kicillof, have feuded with each other and rehashed the disastrous policy prescriptions that ushered Milei into power. "The Peronists are very nostalgic about a golden age that disappeared more than 15 years ago," says Binetti.
“With the information we have today, continuity is more likely than change” next year, says Alejo Czerwonko, chief investment officer for emerging markets at UBS Global Wealth Management. On that assumption, Argentine bonds are a buy. “They are trading at a steep premium over other B-rated credits despite one of healthiest fiscal situations on the planet,” argues Czerwonko.
Aegon's Grills is a tad more cautious, seeing Argentine credit as “not too far from an entry point.” Yields are near, if not at the top of, the emerging market charts, paying a percentage point more than neighboring Ecuador and nearly as much as Gabon, he notes. Vontobel's Larose considers “the outlook for Argentine bonds as challenging but potentially attractive.”
Stagnation might get incumbents thrown out in other countries. In Argentina, it's something of an achievement compared with past chaos and contraction. "Milei is delivering a modicum of stability in the ultimate boom-and-bust economy," Czerwonko says.
Milei has powerful friends to buttress that stability if necessary, at the International Monetary Fund and the U.S. Treasury, which opened a \$20 billion credit line to Buenos Aires to fortify the peso before last year's midterms.
Milei's reforms could still fail, like those of Mauricio Macri before him. But investors may be getting paid adequately for that risk. B
THE STRIKING PRICE
What to Do When Dividend Stocks Fall
BY STEVEN M. SEARS
If the 10-year U.S. Treasury yield remains above 5%, millions of people who rely on stock-generated income to pay their living expenses could grow worried. But fret not—the options market offers a way out.
The effects are already being felt. The ProShares S&P 500 Dividend Aristocrats exchange-traded fund (ticker: NOBL) is down about 3.6% since the 10-year Treasury closed above 5% on Sept. 15 for the first time since 2007. The State Street Utilities Sector SPDR ETF (XLU), also favored by dividend seekers, has also lost 3.6% over the same period.
A deeper decline in the stocks is possible if the Federal Reserve increases interest rates again, as is expected. Higher bond yields could alarm retirees with low thresholds for market volatility and an overreliance on dividends. Dividend stocks are highly sensitive to interest rates because they compete with bonds. When bond returns increase, dividend stocks tend to decline, as their payouts look less attractive.
Dividends might remain stable, but investors could panic when they see the value of their portfolio fall—and companies could cut dividends, or limit increases, as a rising-rate environment increases debt expenses.
The utility sector, for its part, has attracted enormous trading interest—and it doesn't seem to bode well. Bearish short selling on the Utilities ETF was the most active in about six years, per Goldman Sachs data, even as upside call option buying was recently at the highest levels in a year. While some traders point to the call activity as a bet on an XLU rebound, or a short squeeze, our read is that investors short XLU bought calls—which increase in value when stock prices rise—as a hedge.
Too few Americans have enough saved for retirement. They have been forced to own more stocks than recommended for their age to maintain their standard of living. They have high portfolio risk at a stage of life that historically was defined by conservative, bond-heavy portfolios.
If yields keep rising, bonds will become competitive with stocks and millions of retirees could see something that is a rarity in the past 30 years: the failure of stock prices to snap back after a decline in value. Many will likely sell equities if they can finally get higher, and safer, bond returns.
Two strategies are relevant.
Aggressive investors can wager against the Dividend Aristocrat ETF, which, at \$54.30, is below its 20-day simple moving average of \$55.61—a fact that attracts bearish traders like sharks to chum.
With the ETF at current levels, buy the November \$54 put to profit from a decline. The trade costs about 95 cents, but trading volumes are light. At \$50, the put is worth \$4, and the value will continue to increase if the fund tumbles.
Dividend-reliant investors, for their part, can buttress their positions by selling calls on stocks or ETFs, which creates what we call “conditional dividends” that often exceed common stock dividends.
With the State Street Utilities ETF at \$39.83, the December \$42 call could be sold for about 67 cents. If the fund is below \$42 at expiration, the call premium is kept. XLU yields about 3%, and it pays an annual dividend of \$1.21. The strategy risk is if XLU exceeds the strike price, requiring investors to buy the call at a loss, or to adjust it to avoid assignment.
Options income is taxed at personal income rates when generated by a short-term options strategy. Qualified dividend income is taxed at an attractive 15% rate. In addition, selling a call obligates an investor to sell stock if the stock price exceeds the strike price. To avoid that, the call can be adjusted, or rolled, to another expiration.
A proactive approach is smart since dividend stock tremors could worsen, prompting more investors to seek the relative safety of bonds over the risks of stocks. B
If yields keep rising, retirees could see something that's been a rarity in the past 30 years: the failure of stocks to snap higher after a decline in value.
Equity Options
Skew indicates whether the options market expects a stock-market advance or decline. It measures the difference between the implied volatility of puts and calls that are 10% out of the money and expire in three months. Higher readings are bearish.
Meta Platforms executives including CEO Mark Zuckerberg sold over \$50 million of company stock in recent weeks as buzz erupted around the company's Muse AI agent.
On Sept. 24, two entities controlled by Zuckerberg executed a series of stock conversions and multimillion-dollar share sales. First, CZI Holdings, a private wealth holding vehicle, converted 17,140 Class B shares into publicly traded Class A common stock on a one-for-one basis.
That same day, Zuckerberg sold 27,474 total shares for over \$21.3 million. The sales were conducted indirectly through CZI Holdings as well as the Chan Zuckerberg Biohub, a nonprofit research organization. Both entities were co-founded by Zuckerberg and his wife, Priscilla Chan,
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GameStop's Cohen Makes His Third Buy In Less Than a Month
GameStop CEO Ryan Cohen's multimillion-dollar stock buying spree shows no signs of slowing down.
and are tied to their broader philanthropic organization, the Chan Zuckerberg Initiative.
A separate filing shows that Chief Operating Officer Javier Olivan sold 1,575 shares for roughly \$1.2 million on Sept. 28. Most of the shares were sold directly, with the remainder sold indirectly through limited liability companies and a family trust. Olivan executed the sales under a trading plan he adopted on Nov. 17, 2025.
The transaction marked Cohen's third major stock purchase since the start of September. Cohen acquired \$20.4 million in company shares on
A filing with the Securities and Exchange Commission shows that Cohen purchased 450,000 shares for nearly \$10.6 million on Sept. 29, bringing his direct holdings to just over 40.9 million shares. That stake represents roughly $8\%$ of GameStop's shares outstanding.
The transactions were executed under a prearranged trading plan that Zuckerberg adopted on Jan. 31, marking his first stock sales since August 2025, according to filings with the Securities and Exchange Commission.
Chief Product Officer Christopher Cox made an even bigger sale, disposing of 40,000 shares for \$28.5 million on Sept. 21. The sales were made indirectly through a revocable trust in his name.
Sept. 10, followed by an additional \$26.3 million on Sept. 21.
While the CEO and GameStop have remained tight-lipped about the thinking behind his recent purchases, Cohen remarked earlier this year that it was “essential” for chief executives of public companies to buy stock “in order to further strengthen alignment with stockholders.”
Now in his third year at the helm, Cohen has driven aggressive cost-cutting and turnaround efforts to nudge the firm toward profitability.
Cohen began acquiring GameStop stock in late 2020, and his purchases have consistently provided a boost to the shares, which trade heavily on sentiment and hype. Following his buys, the stock has gained an average of 7% in the following trading session, according to Dow Jones Market Data. B
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Activist Filings
Group 1 Automotive (GPI)
Conifer Management raised its stake in the automotive retailer to 1,840,698 shares. Conifer Management did so through the purchase of 478,058 Group 1 Automotive shares from Sept. 9 through Sept. 29 at per share prices ranging from \$235.11 to \$286.58. On Sept. 21, Conifer entered into a stockholder agreement with the company, pursuant to which Group 1 Automotive agreed to expand its board to 11 members and appoint Conifer analyst Benjamin Hart as a director effective on Nov. 1, and Conifer agreed to a standstill capping its ownership at 19%. Following the latest purchases, Conifer owns a 15.4% stake in Group 1 Automotive's outstanding stock. Shares of Group 1 Automotive have lost roughly 39.2% of their value in 2026.
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Increases in Holdings
NewAmsterdam Pharma (NAMS)
Led by CEO Mark Zuckerberg, Meta executives sold more than \$50 million worth of company stock following the release of Meta's Muse AI Agent.
Frazier Life Sciences Management raised its stake in the cholesterol-focused biopharmaceutical company to 18,938,902 shares. Frazier Life Sciences did so through the purchase of 850,000 NewAmsterdam Pharma shares from Sept. 8 through Sept. 18 at per share prices ranging from \$21.08 to \$25.50. Following the latest purchases, Frazier owns a 15.8% stake in NewAmsterdam Pharma's outstanding stock. Shares of NewAmsterdam Pharma have lost roughly 29.5% of their value in 2026.
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Tennant (TNC)
Gamco Investors raised its stake in the floor cleaning equipment maker to 1,022,610 shares. Gamco Investors did so through the purchase of 97,920 Tennant shares from July 29 through Sept. 21 at per share prices ranging from \$66.22 to \$84.93, and slightly offset those purchases through the sale of 850 shares from July 24 through Aug. 27 at \$70.45 to \$87.30. Following the latest purchases, Gamco Investors owns a 6% stake in Tennant's outstanding stock. Shares of Tennant have lost about 9.2% of their value in 2026.
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Colliers International Group (CIGI)
Spruce House Investment Management raised its stake in the real estate services company to 3,282,012 shares. Spruce House did so through the purchase of 489,675 Colliers shares from Sept. 23 through Sept. 28 at per share prices ranging from \$89.68 to \$92.16. Following the latest purchases, Spruce House owns a 6.6% stake in Colliers' outstanding stock. Shares of Colliers International have lost about 38.4% of their value in 2026.
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Decreases in Holdings
Kinetik Holdings (KNTK)
ISQ Global Fund II lowered its stake in the midstream energy services company to 17,618,164 shares. ISQ Global did so through the sale of 480,621 Kinetik Holdings shares from Aug. 20 through Sept. 21 at per share prices ranging from \$53.50 to \$56.45. Following the latest sales, ISQ Global continues to own an 18.4% stake in Kinetik Holdings' outstanding stock. Shares of Kinetik Holdings have gained roughly 40.4% in value in 2026.
This commentary was issued recently by money managers, research firms, and market newsletter writers. Edited by Barron's staff.
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2 Jobs Numbers That Matter
Economic Update
Regions Financial
regions.com
Oct. 2: While many are focusing on the headline metrics—nonfarm job growth, average hourly earnings, the unemployment rate—and assessing what they are saying about the labor market or the broader economy or what they might mean for the FOMC, we'll offer two numbers—53.1% and 60,167—that we think speak volumes.
First, the initial collection rate for the September establishment survey was a ridiculously low 53.1%, which right off the bat renders the initial September estimates of nonfarm employment, hours, and earnings highly suspect. Second, and more importantly, at least if you set aside the low September collection rate, over the 12 months ended in September, the not seasonally adjusted data show private sector payrolls increased by an average of 60,167 jobs per month, or right in line with the trend rate that has prevailed since early 2025. This is, to us, the most relevant data point we can pull from the September employment report; while the estimates of monthly job growth on a seasonally adjusted basis have been all over the map, the underlying trend rate of job growth in the not seasonally adjusted data has been notably stable.
Moreover, though well lower than what we were all accustomed to over the years prior to the pandemic, the current trend rate of job growth is more than adequate to hold the unemployment rate in check, given what is, month to month swings notwithstanding, much weaker labor supply growth. This has been, and remains, our focus.
—Richard F. Moody
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Election Cycles and Stocks
Sadoff Team Commentary
Wealth Enhancement Advisory Services
wealthenhancement.com
Oct. 1: The four-year presidential cycle has historically been a useful guide for understanding market trends. Since World War
To be considered for this section, material, with the author's name and address, should be sent to MarketWatch@barrons.com.
II, the pre-election year (2027) has been the strongest of the four years, on average. In fact, the S&P 500, including dividends, hasn't experienced a negative pre-election year since the 1930s. Many market historians attribute this strength to policymakers' tendency to support economic growth heading into an election year through fiscal and monetary policies that encourage favorable economic conditions.
This year, the midterm election year, has historically been more volatile. It is often associated with larger-than-average market corrections that tend to reach their lows during the September to October time frame. While these periods can be uncomfortable for investors, history suggests they have often created attractive opportunities. Since 1950, the 12 months following a midterm election have produced an average return of 16.6% for the S&P 500, with no negative 12-month periods following the election.
While market volatility often creates uncertainty during midterm election years, history suggests that some of the best gains may lie ahead. When the four-year presidential cycle is analyzed quarter by quarter, the next three quarters emerge as the strongest period of the cycle. On average, the S&P 500 has gained 20.2% during the nine months from Oct. 1 of the midterm election year through June 30 of the following pre-election year.
—Bryan, Michael, and Ronald Sadoff
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Capex Spending Doom
CoreMacro Strategy Report
BCA Research
bcaresearch.com
Oct. 1: Capital spending booms rarely end well for investors. Investing vast sums quickly tends to produce a major decline in returns on capital. And share prices of companies undertaking massive capital expenditure often peak well before their investment outlays do.
Data centers being commissioned today will likely become outdated (and uncompetitive) within a few years as technology improves and low-marginal-cost competitors emerge. This would push hyperscalers' return on equity far below what their current valuations imply.
Given the steep cost of data-center build-outs and technology, providers of compute today are unlikely to hit their profitability
"Since World War II, the pre-election year (2027) has been the strongest of the four years [of the presidential cycle], on average. The S&P 500, including dividends, hasn't experienced a negative pre-election year since the 1930s." –Bryan, Michael, and Ronald Sadoff, Wealth Enhancement
targets. Demand for compute is contingent on token prices. If token prices plummet, demand for compute would rise substantially, but eat into model providers' revenue. However, if token prices don't drop considerably, demand for compute would be underwhelming....
For the AI trade, the canary in the coal mine will be the companies investing heavily in data centers. If their stock prices drop or corporate spreads widen materially, they will face pressure to cut back projected investment. This will weigh on the share prices of their suppliers (semiconductor producers, industrial companies, etc.).
Expectations for U.S. profit growth and AI spending are unrealistic and will correct sooner than most anticipate.
—Arthur Budaghyan
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Credit Spreads' Message
Sevens Report
Kinsale Trading
sevensreport.com
Sept. 30: Credit spreads are the difference in yields between two bonds with the same (or similar) maturities but different credit qualities—for instance, the difference between the yield on a 10-year Treasury and the yield on a 10-year corporate bond, or an index of corporate bonds with a maturity around 10 years. When credit spreads widen, especially in times of low rates, it means the bond market could be pricing in a greater chance of an economic slowdown. However, in times of elevated yields, credit spreads can tell us if bond markets are getting concerned about corporate profits.
We should become more worried about this bull market if the rise in Treasury yields is accompanied by a widening of credit spreads. Positively, that isn't happening now. We watch the Moody's Baa/10-year Treasury yield credit spread, which compares the yield on 10-year debt between the higher end of the "junk" bond complex to the 10-year Treasury yield. Anything above $2.0\%$ is a warning shot, and above that is a potential problem. However, since Aug. 14, around when the 10-year yield really began to accelerate, credit spreads have declined sharply. and recently hit a one-year low of $1.39\%$ . That tells us the rise in Treasury yields isn't being accompanied by increased concern for economic growth or corporate health, and that's a good thing. —Tom Essaye
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Market Sentiment
The panic/euphoria model is a gauge of investor sentiment. It identifies "Panic" and "Euphoria" levels which are statistically driven buy and sell signals for the broader market. Historically, a reading below panic supports a better than 95% likelihood that stock prices will be higher one year later, while euphoria levels generate a better than 80% probability of stock prices being lower one year later.
Source: Citigroup Investment Research - US Equity Strategy
DATA
Statistics from Sept 28 - Oct 2, 2026 | Barron's 50-Stock Average | 51 | Cash Track | 47 | Coming Earnings | 51 | Conference Call Calendar | 51 | Consensus Estimate | 51 | Delta Tactical Sentiment | 51 | Distributions & Offerings | 53 | Dividend Boosts - Reductions | 52 | Dividend Ex-Payment Dates | 52 | DJ Averages | 49 | DJ U.S. Total Market Industry Groups | 51 | Dow Jones Averages | 49 | Dow Jones Per Share Values | 50 | Exchange Traded Portfolios | 46 | Federal Reserve Data Bank | 52 | Foreign Exchange | 51 | Gold & Silver Prices | 52 | Gold Mining Index | 52 | Indexes P/Es & Yields | 50 | Initial Public Offerings | 50 | Investor Sentiment Readings | 50 | Key Foreign Market Indexes | 45 | Market Lab | 49 | Money Rates, U.S. & Foreign | 51 | Mutual Funds | 47 | N.Y. Stock Exchange | 37 | Nasdaq National Market | 41 | New Corporate Listings | 50 | New Highs & Lows | 53 | NYSE Half-Hourly Volume | 50 | Other Market Indexes | 49 | Pulse of the Economy | 51 | Stock Splits - Special Dividends | 52 | Stock Volume | 50 | Trading Diary | 49 | Vital Signs | 30 | Week In Stocks | 50 | Weekly Bond Statistics | 52 | Winners & Losers Stocks | 35 | Contact Us
For queries, email us at editors@barrons.com
NEW YORK STOCK EXCHANGE COMPOSITE LIST - NEW HIGHS - NEW LOWS |
-52-Week- |
Tick | Div | High | Low | Name | Sym | Yld | P/E | Last | Chg. | Amt. |
Why Is It So Hard: NYSE Composite breadth fell for a seventh week as the S&P 500 dipped 0.3% as gains in tech stocks helped offset weakness elsewhere. Losing stocks outpaced winners by nearly 2 to 1.
In generating this chart, we subtract each day's NYSE composite declines from that day's advances. The resultant total is added to the next day's total, and so on. When all five days' numbers are added together, this produces the weekly figure we plot. Dec. 31, 1985 =1000. |
Chip Power: The Nasdaq Composite Index closed Friday at 27,191, up 0.5% for the week and just shy of its 27,244 record on Sept. 22. Nvidia neared it record close. Micron reported a stunning gross margin of 87%.
BlackRock Funds A: | AdvLgCapCore | 25.39 | -0.08 | 18.2 | 99.0 | CapAppr | 32.65 | 0.28 | 16.6 | 98.4 | EqtyDivd | 21.89 | -0.30 | 13.6 | 67.7 | GlblAlloc | 20.44 | -0.05 | 7.6 | 54.6 | HlthScOp | 63.24 | -1.77 | 8.1 | 38.2 | MultiAstIncome | 10.36 | -0.08 | 2.6 | 33.3 | NatIMuni | 9.46 | 0.03 | -2.8 | 7.8 | ScTechOppA | 88.55 | 2.00 | 41.2 | 163.9 | The listings include the top 1250 open-end funds by assets. These funds value their portfolios daily and report net asset values (the dollar amount of their holdings divided by the number of shares outstanding) to the National Association of Securities Dealers. Total returns reflect both price changes and dividends; these figures assume that all distributions are reinvested in the fund. Because Lipper is constantly updating its database, these returns may differ from those previously published or calculated by others. 3 year returns are cumulative. The NAV is the last reported closing price for the week. Footnotes: NA: not available. NE: performance excluded by Lipper editor. NN: fund not tracked. NS: fund not in existence for whole period. e: ex capital gains distributions. f: previous day's quote. n: no front- or back-end sales charge. p: fund assets are used to pay marketing and distribution costs (12b-1 fees). r: fund levies redemption fee or back-end load. s: stock dividend or split of 25% or more. t: fund charges 12b-1 fees (for marketing and distribution) and a back-end load. v: capital-gains distribution may be a return of capital. x: ex cash dividend. | NAV | Net Chg. | YTD % Ret. | 3-Yr. % Ret. | NwWrldA | 107.14 | -1.23 | 14.9 | 71.6 | SmCpA | 82.22 | 0.30 | 12.2 | 49.8 | STBFA | 9.36 | 0.00 | -0.1 | 12.2 | TxExA | 11.81 | 0.00 | -3.2 | 10.7 | WshA | 66.22 | -0.67 | 6.5 | 65.9 |
AMG Managers Funds: |
YachtmanFocFd I24.08 | NA | NA | NA | YacktFocFd N n | 24.19 | NA | NA | NA | YacktmanFd I | 26.47 | NA | NA | NA |
Angel Oak Funds Trst: | AglOkMtiStFdClIn | 8.52 | NA | NA | NA |
AQR Funds: | DAFR6 | 13.30 | NA | NA | NA | DivStr I | 15.53 | NA | NA | NA | EqMktNeut R6 | 12.34 | NA | NA | NA | LngShrtEq I | 22.57 | NA | NA | NA | MgdFutStrI | 11.34 | NA | NA | NA | Multi-Asset R6 | 13.28 | NA | NA | NA | StylePremAlt R | 11.14 | NA | NA | NA |
Take the Money: More cash came back to stock funds, narrowing their trailing month's average weekly outflow to \$570 million. Money-market funds saw their outflows surge to \$23.9 billion, on average. Taxable-bond fund cash inflows grew slightly, to average \$5.1 billion a week, while muni-bond funds had widening outflows, averaging \$400 million.
Equity Funds
Municipal Bond Funds
A red chart indicates a lower value than the starting period. Green means it's higher than the starting period. The charts above show four-week moving averages of net cash flow in millions of dollars.
Metropolitan West: | TotRetBd | 8.66 | NA | NA | NA | TotRetBdl | 8.66 | NA | NA | NA | TRBdPlan | 8.12 | NA | NA | NA | UnconstrBdl | 10.10 | NA | NA | NA |
Nicholas Group: | Nich n | 95.84 | 0.22 | 8.3 | 49.5 |
Northern Funds: | Bdldx n | 8.81 | NA | NA | NA | EmMktsEqldx nr | 17.96 | NA | NA | NA | HiYFxInc n | 5.84 | NA | NA | NA | IntlEqldx nr | 19.18 | NA | NA | NA | MidCpldx n | 23.32 | 0.14 | 12.1 | 55.1 | SmCapIdx n | 17.82 | -0.02 | 15.2 | 67.9 | StkIdx n | 76.88 | -0.19 | 13.8 | 87.0 |
Victory Funds: | EstVall | 48.78 | NA | NA | NA | SmCoOppl | 51.14 | NA | NA | NA |
Victory Port: | RS Global Fd Y | 31.66 | NA | NA | NA | Market Neutral I | 9.28 | NA | NA | NA | SSfnd | 51.04 | NA | NA | NA | VsycamoreFnd | 48.81 | NA | NA | NA |
Victory Portfolios I: | 500Indx Reward n | 93.01 | NA | NA | NA | CrnstModAggr n | 29.68 | NA | NA | NA | Gr&Inc n | 28.45 | NA | NA | NA | Grwth n | 42.71 | NA | NA | NA | Inco n | 11.14 | NA | NA | NA | IncStk n | 21.05 | NA | NA | NA | Intl n | 34.03 | NA | NA | NA | IntmTerm n | 11.87 | NA | NA | NA | Nasdaq100 n | 73.18 | NA | NA | NA | S&PIdx n | 92.93 | NA | NA | NA | SciTech n | 41.69 | NA | NA | NA | TarRet2040 n | 15.84 | NA | NA | NA | VicAggFnd n | 82.18 | NA | NA | NA | SustWld n | 35.65 | NA | NA | NA | CorePlus INSTL | 8.77 | NA | NA | NA | Income Fund INST | 11.14 | NA | NA | NA | Short-Term INSTL | 8.98 | NA | NA | NA |
Wilmington Funds: | RoxSCG Inst | 103.79 0.39 | 17.3 | 130.5 | Components | Week's Change | American Elec Power | 1.22 | American Water Works | -0.66 | Atmos Energy | -0.04 | Consolidated Edison | 0.29 | Dominion Energy | 0.63 | Duke Energy | 0.78 | Edison International | 1.24 | Exelon | 0.39 | FirstEnergy | 0.04 | NextEra Energy | 0.75 | Public Svc Enterprise | 1.05 | Sempra | 0.45 | Southern | 0.84 | Vistra | 1.56 | Xcel Energy | 1.60 | ---
The Dow Jones Averages
---
Industrials | Components | Week's Change | 3M | -7.66 | Alphabet CI A | -0.42 | Amazon.com | 1.85 | American Express | -6.11 | Amgen | -11.57 | Apple | -7.38 | Boeing | -4.51 | Caterpillar | 23.84 | Chevron | 2.24 | Cisco Systems | 5.50 | Coca-Cola | -2.16 | Disney | -3.96 | Goldman Sachs | -32.89 | Home Depot | -10.35 | Honeywell International | 1.44 | IBM | -2.87 | Johnson & Johnson | -15.19 | JPMorgan Chase | -10.68 | McDonald's | -4.61 | Merck | -4.48 | Microsoft | 1.36 | Nike CI B | -1.88 | NVIDIA | 8.88 | Procter & Gamble | -1.32 | Salesforce | 0.67 | Sherwin-Williams | -9.59 | Travelers | -2.66 | UnitedHealth Group | -4.69 | Visa CI A | -6.72 | Walmart | -3.72 |
---
Transportation | Components | Week's Change | Alaska Air Group | -1.41 | Avis Budget Group | 2.93 | CH Robinson Worldwide | 10.62 | CSX | 0.65 | Delta Air Lines | -0.85 | Expeditors Intl of Wash | 5.01 | FedEx | 4.51 | FedEx Freight Holding | -0.29 | JB Hunt Transport | 8.74 | Kirby Corp | 8.99 | Landstar System | 9.71 | Matson | 6.45 | Norfolk Southern | 4.44 | Old Dominion Freight Line | 7.18 | Ryder System | 1.67 | Southwest Airlines | -0.21 | Uber Technologies | -1.51 | Union Pacific | 4.49 | United Airlines | -1.48 | United Parcel Service B | -0.94 | ---
Utilities
Note: Theoretical highs and lows are shown. A red chart indicates a lower price than the starting period. Green means it's higher than the starting period.
Green Machine: The rise in long-term Treasury yields to multidecade highs gave a lift to the dollar. Inflation, economic growth, and concern about budget deficits all played a role. Measuring the dollar against six currencies, the ICE U.S. Dollar Index climbed 0.92%.
Source: Tullett Prebon
---
Yearly High/Lows S&P 500 Index
The yearly S&P 500 Index; with a high/low range based on the daily close. | Year |
High | Date |
Low | Date | 2026 | 7798.99 | Aug | 13 | 6343.72 | Mar. | 30 | 2025 | 6932.05 | Dec | 24 | 4982.77 | Apr. | 08 | ---
144 Filings
---
Coming U.S. Auctions |
Monday |
|
Yields (%) | When Issued* | Last Auction | $95.0 bil | 3-month | 4.069 | 4.110 | $82.0 bil | 6-month | 4.269 | 4.285 | Tuesday | $58.0 bil | 3-year | 4.906 | 4.474 |
* As of Friday afternoon. | SEC Form 144 must be filed by holders of restricted securities (also called letter stock) who intend to sell shares. Shares Indicated: the number to be sold. Sales Date: the approximate date of the sale. (Sometimes shares aren't sold, even though their owner has filed a Form144.) Source: LSEG Data and Analytics | Company | Sym | Shares Indicated | $ Value | Sale Date | Seller | Title | Kodiak Ai | KDK | 3,250,000 | 9,035,000 | 9/25/26 | Wendel, Andreas | AF | Sinclair | SBGI | 298,808 | 3,845,659 | 9/24/26 | Smith, Frederick | D | Coreweave | CRWV | 200,000 | 17,014,000 | 9/29/26 | Intrator, Michael | H | Roivant Sciences Ltd | ROIV | 200,000 | 7,323,556 | 9/30/26 | Venker, Eric | O | Coca-Cola | KO | 184,117 | 16,167,314 | 9/28/26 | Mann, Jennifer | O | Atlanta Braves | BATRK | 175,395 | 9,460,806 | 9/30/26 | Schiller, Derek | O | Pagerduty | PD | 172,500 | 2,578,875 | 9/30/26 | Tejada, Jennifer | OD | Alto Neuroscience | ANRO | 134,886 | 3,596,061 | 9/29/26 | Smith, Nicholas | O | Cerebras Systems | CBRS | 120,000 | 24,769,200 | 9/25/26 | Lie, Sean | O | Vornado Realty Trust | VNO | 90,000 | 3,074,400 | 9/25/26 | Chera, Haim | O | ---
Indexes' P/Es & Yields
DJ latest 52-week earnings and dividends adjusted by Dow Divisors at Friday's close. S&P Dec. 4-quarter's GAAP earnings as reported and indicated dividends based on Friday close. S&P 500 P/E ratios based on GAAP earnings as reported. For additional earnings series, please refer to www.spglobal.com. DJ latest available book values for FY 2025 and 2024, and S&P latest for 2023 and 2022. r-Revised data | Last Week | Prev. Week | Last Year | DJ Ind Avg | 51176.96 | 51828.62 | 46758.28 | P/E Ratio | 21.64 | 21.85 | 25.79 | Earns Yield % | 4.62 | 4.58 | 3.88 | Earns $ | 2365.14 | 2372.51 | 1812.78 | Divs Yield % | 1.51 | 1.49 | 1.58 | Divs $ | 771.54 | 771.48 | 739.35 | Mkt to Book | 5.62 | 5.69 | 5.86 | Book Value $ | 9101.95 | 9101.95 | 7981.11 | DJ Trans Avg | 20009.75 | 19572.22 | 15840.61 | P/E Ratio | 28.71 | 28.08 | 33.41 | Earns Yield % | 3.48 | 3.56 | 2.99 | Earns $ | 697.05 | 697.05 | 474.09 | Divs Yield % | 1.23 | 1.26 | 1.56 | Divs $ | 247.04 | 247.04 | 246.50 | Mkt to Book | 4.72 | 4.62 | 3.94 | Book Value $ | 4239.73 | 4239.73 | 4022.00 | DJ Utility Avg | 1018.02 | 1010.32 | 1124.60 | P/E Ratio | 16.73 | 16.61 | 20.71 | Earns Yield % | 5.98 | 6.02 | 4.83 | Earns $ | 60.84 | 60.84 | 54.30 | Divs Yield % | 3.17 | 3.20 | 2.74 | Divs $ | 32.32 | 32.32 | 30.76 | Mkt to Book | 2.09 | 2.07 | 2.47 | Book Value $ | 487.43 | 487.43 | 455.54 | S&P 500 Index | 7722.72 | 7743.41 | 6715.79 | P/E Ratio | NA | NA | 30.99 | Earns Yield % | NA | NA | 3.23 | Earns $ | NA | NA | 216.69 | Divs Yield % | NA | NA | 1.16 | Divs $ | NA | NA | 77.90 | Mkt to Book | NA | NA | 5.70 | Book Value $ | NA | NA | 1178.57 | S&P Ind Index | 11546.15 | 11541.32 | 9723.23 | P/E Ratio | NA | NA | 35.12 | Earns Yield % | NA | NA | 2.85 | Earns $ | NA | NA | 276.86 | Divs Yield % | NA | NA | 1.01 | Divs $ | NA | NA | 98.20 | Mkt to Book | NA | NA | 7.64 | Book Value $ | NA | NA | 1272.56 | ---
The Arms index, also known as the short term trading index, is a number derived by dividing one quotient into another quotient. The numerator in the index is the number of advancing stocks divided by the number of declining stocks. As of 3/14/11, the denominator in the index is now the composite volume of advancing stocks divided by the composite volume of declining stocks.
40.6% | Electric power, (mil. kw hrs) (EEI) | Sept 26 | 83,811 | 92,280 | 84,530 | -0.85 | Petroleum, related capacity, % | Sept 25 | 92.5 | 94.0 | 91.4 | 1.20 | Rotary rigs running, U.S. & Can., (Hughes) | Oct 2 | 814 | 807 | 739 | 10.15 | Steel, (thous. tons) | Sept 26 | 1,845 | 1,785 | 1,770 | 4.24 | Steel, rated capacity, % (AISI) | Sept 26 | 80.5 | 77.9 | 78.1 | 3.07 | The Delta MSI measures the position of a representative set of stocks relative to an intermediate-term moving average crossover (MAC) point. When greater than 50% of the stocks are above this MAC point, the market is bullish. When the indicator is below 50%, the market is bearish and risk is elevated. Manager uses discretion on asset allocation when MSI is at 50% +/- 3%. |
Consumption and Distribution | Consumer spending, (bil. $) | Aug | 22,308.5 | r22,117.7 | 21,029.5 | 6.08 | Factory shipments, (bil. $) | Aug | 658.62 | r658.65 | 606.85 | 8.53 | Instinet Research Redbook Avg. (monthly %) | Sept 26 | -0.42 | 0.53 | 0.76 | .... | Baltic Dry Index | Oct 2 | 3,148 | 3,426 | 1,901 | 65.60 | Personal consumption, (bil. $) | 2nd Qtr | 16,788.7 | r16,634.2 | 16,378.3 | 2.51 | Pulse of the Economy |
Special Drawing Rights (SDR) are based on exchange rates for the U.S., British, and Japanese currencies. Source: International Monetary Fund. a-Russian Central Bank rate. b-government rate. d-rebased as of Jan. 1, 2005. y-floating rate.
---
CBOE Put / Call Ratio vs. S&P 100
Readings in the CBOE equity put-call ratio of 60:100 and in the S&P 100 of 125:100 are considered bullish, for instance. Bearish signals flash when the equity put-call level reaches the vicinity of 30:100 and the index ratio hits 75:100.
Coming Earnings | Consensus Estimate | Year ago |
T | Constellation Brands (Q2) | $3.55 | $3.63 |
W | Levi Strauss (Q3) | 0.36 | 0.34 |
TH | Pepsico (Q3) | 2.30 | 2.29 |
F | Delta Air Lines (Q3) | 1.94 | 1.71 | Consensus Estimate
Day | Consensus Est | Last Period | T | August Trade Balance | -$95.0 bil | -$88.6 bil | W | August Consumer Credit | $15.6 bil | $18.1 bil | F | October Michigan Sentiment | 48.0 | 48.1 | Money Rates
Unless otherwise indicated, times are Eastern. a-Advanced; f-Final; p-Preliminary; r-Revised Source: FactSet | Latest Week | Prev. Week | Yr Ago | Discount Rate (NY) | 4.00 | 4.00 | 4.25 | Prime Rate (base) | 7.00 | 7.00 | 7.25 | For more information about coming economic reports - and what they mean - go to Barron's free Economic Calendar at www.barrons.com
Conference Call Calendar | Company | Date | Time | Earnings-Related Period | Delta Air Lines | October 9 | 10:00AM | Q3 |
Gold & Silver Prices | DJ Energy | 10/2 | 9/25 | Year Ago | Gold, troy ounce front month futures price | 4133.70 | 4286.20 | 3880.80 | Silver, troy ounce | 59.98 | 64.25 | 47.60 | Base for pricing gold and silver contents of shipments and for making refining settlement. | Coins | Price | Premium $ | Premium % | Krugerrand | 4311.48 | 165.83 | 4.00 | Maple Leaf | 4352.93 | 207.28 | 5.00 | Mexican Peso | 5006.41 | 8.00 | 0.16 | Austria Crown | 4066.57 | 3.00 | 0.07 | Austria Phil | 4352.93 | 207.28 | 5.00 | U.S. Eagles | 4352.93 | 207.28 | 5.00 | Premium is the amount over the value of the gold content in the coin. Source Manfra, Tordella & Brookes, Inc. Bullion spot gold price 4145.65
---
Gold Performance
Tarnished: With bonds yields rising, gold prices fell 3.6%, to \$4,134 an ounce.
---
Weekly Bond Statistics | New Offerings, (mil $) (v) | Last Week | Prev. Week | Yr Ago | Corporate (z) | 11,115 | r42,437 | 12,925 | Municipal (z) | 4,971 | r11,225 | 9,704 |
(Barron's index of 10 high-grade corporate bonds.) | 5.44 | 5.33 | 4.27 |
(Barron's index of 10 medium-grade corporate bonds.) | 6.09 | 5.95 | (High-grade index divided by intermediate-grade index; decline in latter vs. former generally indicates rising confidence, pointing to higher stocks.)
Other Confidence Indicators:
Bloomberg Barclays US Long Treasury\*
Bloomberg Barclays US Credit
(This index includes all publicly issued, fixed-rate, non-convertible, investment-grade, dollar-denominated, SEC-registered corporate debt.) |
(Index of yields of 20 general obligation municipal bonds.) | 5.21 | 5.13 | (Index of 40 actively-traded tax-exempt bonds; component issues are changed regularly to keep the index a current picture of the market. Source: The Bond Buyer
(Difference between yield on highest-grade corporate bonds and yield on stocks on the DJIA.) -3.93 -3.84 -2.69 |
Yield on DJ Equal Weight US Corp Bond Idx: | Corp Bonds, (y) | 6.28 | 6.21 | 4.92 | ---
Federal Reserve Data Bank
v-Week ended Thursday. y-Yield to maturity, week ended Thursday. z-Source: LSEG. \*Barclays T-Bond Index discontinued by firm. | Member BankReserve Chgs. (Mil. $) | LatestWeek | Prev. WeekChange | Year AgoChange |
Dividend Payment Reductions | Company Name-Ticker Symbol (Exchange) | Adjusted Yield | Period | To | From | % Decrease | Record Date | Ex-Div Date | Payment Date | Coca-Cola Femsa ADR-KOF (NYSE) | 3.6 | S 1.083827 | 1.110645 | -2.4% | 10-09 | 10-09 | 10-23 | ---
Quarterly Dow Jones Industrial Average
This table lists the earnings of the Dow Jones Industrial Average component stocks based upon generally accepted accounting principles. Earnings include discontinued and nonrecurring items but exclude extraordinary items and accounting changes as reported by the company and adjusted by the Dow Divisor in effect at quarter-end. The total dividends of the component stocks are based upon the record date and adjusted by the Dow Divisor in effect at quarter end. The payout ratio is the latest 12-months dividends divided by the latest 12-months earnings. r- Revised to correct Microsofts Q4 earnings released on Jan. 24, 2013. | Year Ended |
Special Dividends | Company Name-Ticker Symbol (Exchange) | Amount | Record Date | Ex-Div Date | Pay Date | Danaos-DAC (NYSE) | 5.00 | 10-13 | 10-13 | 10-22 | Gentherm-THRM (Nasdaq) | 2.07 | 9-28 | 10-02 | 10-07 | OpenWorld-OPNW (NCM ) | 1.50 | 9-29 | 10-01 | 10-02 | ---
Quarterly Dow Jones Industrials
The table below lists the total earnings (losses) of the Dow Jones Industrial Average component stocks of record based on generally accepted accounting principles as reported by the company and adjusted by the Dow Divisor in effect at quarter end and the total dividends of the component stocks based on the record date and adjusted by the Dow Divisor in effect at quarter end. N.A.-Not available. r-Revised. | Year |
Quarter Ended | Close Price | Qtrly Earns | 12-Mo. Earns | P/E Ratio | Qtrly Divs. |
2026 | Sept. | 30 | 50906.05 | NA | NA | NA | 194.69 | June | 30 | 52319.20 | 830.32 | 2405.65 | 21.75 | 201.27 | Mar. | 31 | 46341.51 | 546.89 | 2066.71 | 22.42 | 199.32 |
United Community Banks .26 | Graphic Packaging | .11 | H & R Block | .46 | Marcus & Millichap | .25 | Sibanye-Stillwater ADR | .499 | Sibanye-Stillwater ADR | .493 | Wednesday (October 7) | Bruker | .05 | FirstService | .305 | Gentherm | 1.90 | Gentherm | 1.90 | Heartland Express | .02 | Kulicke & Soffa Inds | .205 | News Corp CI A | .10 | News Corp CI B | .10 | Seagate Technology | .74 | Albany International | .28 | Avient | .275 | Designer Brands | .05 | Dole | .085 | Eastman Chemical | .84 | ENI ADR | .628 | Ferguson Enterprises | .89 | HP | .30 | J.Jill | .09 | Merck | .85 | Orion | .021 | Thursday (October 8) | Bank7 | .30 | BayCom | .30 | NXP Semiconductors | 1.014 | Banco Bradesco Ord ADR | .003 | Belden | .05 | Best Buy | .96 | Build-A-Bear Workshop | .23 | Edgewell Personal Care | .15 | Grupo Aval Acciones ADR | .013 | GSK ADR | .452 | Royal Caribbean Group | 1.50 | Salesforce | .44 | SLB | .295 | Taiwan Semiconductor | 1.114 | VICI Properties | .46 | ATN International | .29 | Chicago Atlantic BDC | .34 | GlobalFoundries | .12 | ICF International | .14 | Independent Bank | .64 | Keurig Dr Pepper | .23 | NRC Health | .16 | Steel Dynamics | .53 | Towne Bank | .28 | Virco Manufacturing | .025 | Washington Trust Bancorp | .56 | Altria Group 1.11
Curtiss-Wright .26
Dine Brands Global .19
Flowserve .22
Franklin Templeton .33
Illinois Tool Works 1.72
Intl Flavors & Fragrances .40
Omnicom Group .80
Progressive .10
Quanta Services .11
Ralph Lauren CI A 1.00
Schneider National .10
ServisFirst Bancshares .19
Titan America .04
Tronox Holdings .05
Turning Point Brands .08
---
Week's Dividend Payment
This list includes payouts on common stocks.
Monday (October 5)
Bluerock Homes Trust .125
Tuesday (October 6)
NONE
PubMatic
Quantum
RozeAI
NYSE
BelpointePrep
NEW HIGHS
SB Financial
New Highs
AcmeUnited
New Highs
LegatoMergerIV
CalidiBiotherap
Only includes COMMON and REIT stocks
New Highs
New Lows
New Lows
CrowdStrike
New Lows
DDC Enterprise EmpirePetrol
Cryoport
CSLM Digital III
Schrodinger
DoubleDown
Cal-MaineFoods
DrugsMadeInAm
EndoviaHlthScncs
GeniusGroup
Exelixis
GuardianMetal HostDigital
FifthEraAcqnI
HyperscaleData ITTechPkg
IncomeOppRealty
Inuvo
Flexsteel
SiddhiAcqr
AddexTherap
FutureMoney
SightSciences
Genmab
GlobaTerraA
LineageCell
MegaMatrix
GSRIVAcqn
HallChadwickA
AksoHealth
HarvardAveA
AirWaterVent
StandardLithium
Oragenics
HighviewMerger
NE Realty
Hongli
AllianceEnt
PhaosTech
Illumina
TesseraDefense
Innospec
IovanceBiotherap
K&FGrowthII
Campbell's
TrioPetroleum
JerashHldgs
K2CapitalAcqn
TOP Ships
KodiakSciences
Ur-Energy
KY FirstFedBncp
CanadianSolar
VolitionRX
LakeSuperiorA
908Devices
AbCelleraBio
LeapfrogAcqn
AbleViewGlobal
LindbladExped
---
Nasdaq
Accelevation
ArcadiaBiosci
LiquiditySvcs
Agenus
DirectDigital
Aldabra4Liquid
CantorEqPtrsVII
Materialise
MercatorAcqnA
ApertureAC
ARKRestaurants
ApogeeAcqnA
Moderna
Natera
ArmadaAcqnIII
ARS Pharm
NetApp
ArtTechAcqn
AtlantaBravesA
Biogen
AvitaMedica
AudioCodes
NVIDIA
AstecIndustries
ArriveAI
OceanhawkAcqn
C&FFin
GlobalIndemnity
AtlasLithium
AtriumTherap
Cardlytics
GeospaceTech
GlobalMofyAI
OTGAcqnI
Aurelion
OxleyBridgeAcqn
Carecloud
PaloAltoNtwks
BanzailIntl
Paysign
BarfreshFood
CaribouBio
BaselMedical
PCConnection
BenitecBiopharm
CenturyCasinos
PeaceAcqn
CDT Equity
BeyondAir
CatalystAcqnCorp.A
BeyondMeat
PioneerAcqnIA
BGM Group
PMV Pharm
Precigen
BicycleTherap
BinahCapital
Neo-Concept
BiodexaPharm
NeOncTech
BioRestorative
NeighborhoodIntel
NeuroOneMed
NauticusRobot
Bloomia
Goodyear
NeuroSense
Louisiana-Pacific
BraggGaming
Equifax
RegionalMgmt
loanDepot
Reformation
BraveheartBio
Endava
GOWellEnergyTech
JacksonAcqnIIA
EdisonIntl
FirstWatchRest
MSC Industrial
EquityLife
Ferrovial
LithiumAmericas
FoghornTherap
Grandstand
ESSTech
IvesUltraAI0pps
J.Jill
ReadyCapital
IrisAcqnII
ForemostCleanEner
FortressBiotech
NewFortressEnergy
Forbright
Rentokillnit
Fusemachines
NexeraTech
GameYourGame
FluxPower
FreightTech
Materion
Freightos
Gaming&Leisure
EssentialProp
NexMetalsMining
FTAI Infra
FullHouse
Mettler-Toledo
LCI Inds
EveHolding
---
U.S. Treasury Bills
PSEG
NordicAmTankers
JBT Marel
EvercoreA
OceanCapAcqn
Gaxos.ai
NovaBridgeBio
Avista
T-MobileUS
EversourceEner
ManhattanBridge
AtmosEnergy
LumenTech
JobyAviation
PBF Energy
AutoNation
TEN Holdings
FairIsaac
PlutonianAcqnII
RogersComm B
RocketCos.
PennyMacFin
Prudential
LumentFinance
FedExFreight
FidNatllInfo
GD Culture
PiperSandler
PostHoldings
Yelp
FinanceofAm
MachNaturalRscs
FinVolution
TeekayTankers
FiverrIntl
McCormick
YumChina
SPX Tech
XtendAIRobotics
MediromHIthcr
MDB Capita
GranitePointMtg
Pyxis Oncology
MetalsRoyalty
Lantern Pharma
MidAmApt
The following table lists the monthly average of the Price/Earnings Ratio and Dividend Yield as reported weekly in Barron's Market Laboratory. The change is the difference between the recent month's close and the previous month's close. The high/low range is based upon the closing average for each day during the month.
Capitalism Is Out Of Style. Both Parties Are to Blame.
O n the midterms campaign trails, dark economic clouds are forming. Progressives are pitching expanded social
programs and regulations, ignoring the realities of administrative inefficiencies, moral hazard, and distortionary financing. Conservatives aren't signaling plans to reverse course from the president's market-distorting tariffs, counterproductive immigration quotas, and skewed industrial subsidies.
Their campaigns reflect a growing ideological trend in the U.S.: Ameri-
BY CLIFFORD WINSTON
The writer is a nonresident senior fellow at the Brookings Institution and author of Market Corrections Not Government Interventions: A Path to Improve the U.S. Economy.
cans' support for capitalism has declined over the past decade. More than 40% of Americans said in a recent Gallup poll that they think positively of socialism, and a recent Wall Street Journal survey found a wide majority from both parties strongly support interventionist economic policies like price ceilings for prescription drugs and child care. At the same time, polls show favorability of market-oriented systems is falling, perhaps because the public misattributes rising costs to—in broad strokes—“capitalism.”
Despite receiving increasingly less credit for it, the private sector has been the ultimate source of U.S. economic
Without competitive pressure from a viable third party, the two major parties face no electoral penalty for perpetuating economic waste.
efficiency and resilience. Decades of empirical economic research have identified the market-based policies that have reliably improved human welfare and the counterproductive government interventions that haven't.
The deregulation of transportation, telecommunications, and energy has been successful in generating hundreds of billions of dollars in consumer surplus by allowing competitive entry and pricing. Free trade benefits consumers by reducing prices and increasing product variety. Efficient-pricing mechanisms to reduce externalities, such as congestion pricing or pollution charges, can produce significant social benefits.
In contrast, protective import tariffs and heavy-handed command-and-control mandates, such as increasingly stringent federal fuel-economy standards and tailpipe emissions rules, consistently backfire, raising consumer prices, misallocating capital, and imposing compliance costs that dwarf any public benefit.
Those insights are being ignored across the political spectrum. Political competition instead relies on concentrated handouts and broad slogans like Build Back Better and Make America Great Again, which may work well in stump speeches but obscure the waste created by the parties' actual policies.
In a better-functioning political market, our electoral system would reward candidates who offer the most-efficient, evidence-based economic policies. But voters rarely organize around complex efficiency metrics, such as welfare loss calculations, the Marginal Value of Public Funds, or benefit-cost ratios.
This lack of commonly understood benchmarks for good economic policy creates a vacuum filled by special interests who extract concentrated benefits from the dysfunction. America's entire taxpayer base pays the price. And, in the absence of competitive pressure from a viable third party, the two major parties face no electoral penalty for perpetuating economic waste.
Given this, how does the U.S. continue to maintain its position as a global economic powerhouse? Historically, the answer has been in the profound separation of public and private spheres in the U.S.: The primary driver of American prosperity hasn't been the foresight of its government but rather the sheer inertia, dynamism, and scale of its private sector.
The vast majority of economic activity in the U.S. occurs within highly competitive private markets supported by the deepest, most liquid capital markets. This enables rapid reallocation of capital toward productive ideas, despite government distortions. And a deeply ingrained culture of risk-taking allows businesses to adapt to, innovate around, and absorb the cost of ill-conceived regulatory and trade policies.
Independent institutions—most notably the Federal Reserve and an independent judiciary—mitigate the most extreme swings of partisan policy, preserving monetary and contractual stability. In addition, the federal system allows states to act as competing jurisdictions for labor and capital. When federal policies create inefficiencies, interstate competition acts as a pressure valve, allowing businesses and households to vote with their feet toward more efficient environments.
So, unlike state-directed economies or centralized regimes that can paralyze commerce overnight, the U.S. maintains powerful baseline economic momentum, buffering its citizens from Washington's worst impulses. Of course, the economy would perform better with a smaller efficiency deficit, but its resilience obscures those losses.
Because the private sector operates so effectively in the background, politicians are able to take credit for the economy when convenient. (When it isn't, they readily scapegoat capitalism.)
The midterms will ultimately amount to elaborate political theater along those lines. And the persistent failure of both major parties to prioritize economic efficiency will remain a burden on the public—depressing long-term growth, raising consumer costs, and wasting resources. Yet, the fundamental lesson of America’s political economy is one of unexpected optimism. The genius of the system isn’t that it produces enlightened policymakers; it’s that it fosters a dynamic, decentralized economy capable of thriving in spite of them. B
RETIREMENT
MAILBAG
How Retirees Should Think About Bonds Now
BY ELIZABETH O'BRIEN
Bonds' recent rout has retirees wondering if fixed income still deserves a place in their portfolios. The answer? It depends.
Yields have climbed sharply in recent weeks on factors including the ongoing war in Iran and the resulting higher oil prices, inflation fears, deficit concerns, and a supply glut of bonds. The 10-year Treasury closed out the quarter at 5.29%, after its largest one-quarter gain since March 1994; the 30-year Treasury hit 5.64%, a level not seen since June 2002.
Prices, which move inversely to yields, have fallen. The Bloomberg U.S. Aggregate Bond Index has declined about 5.6% for the year, or 2.7% on a total-return basis. Today's prices largely reflect investors' expectations that the Federal Reserve will raise interest rates at least one more time this year, but if the pace of hikes exceeds expectations, prices could fall more.
“We have a Nor’easter blowing through the bond market,” said Ed Yardeni, president of Yardeni Research, in a recent webinar. That’s the bad news for existing bondholders. The good news is that future total return prospects have improved. A bond’s starting yield is a rough proxy for the total return that investors can expect, and the aggregate index yields nearly 5%. That presents an opportunity for investors looking to add to their fixed-income portfolios.
Another silver lining is that yields are rising on money-market funds, certificates of deposits, and other cash instruments, providing some competition for bonds. Should investors follow the playbook of Warren Buffett and eschew bonds in favor of stocks and cash (including short-term T-bills)? Not exactly.
But it does pay to consider your goals and risk tolerance. Some retirees don't like to see volatility in the “safe” part of their portfolios. If you buy individual bonds and hold them to maturity, you can clip your coupon without worrying about price fluctuations. But you need north of \$100,000 to create a diversified portfolio of individual bonds, advisors say, so that's not for everyone.
If there's a general consensus right now, it's that individual investors should avoid the long end of the yield curve. Yields get fatter the further out you go, but it comes at a price of increased volatility. On Wednesday, the iShares 20+ Year Treasury Bond exchange-traded fund, for example, experienced its lowest close since 2002. It's down about $10.5\%$ for the year.
Consider an allocation to alternatives. Rather than the traditional portfolio of 60% stock/40% bonds, think about a split of 60/30/10% alternatives or 60/20/20. In the latter, the 20% bond portion could hold a mix of short-term bonds, actively managed strategic income funds, and core bonds, says Mike McMeans, president of Silverling Financial in Columbus, Ohio.
For an income-generating alternative to traditional bonds, the actively managed Janus Henderson AAA CLO ETF offers exposure to collateralized loan obligations, a securitized pool of loans; it is up 3.4% year to date on a total return basis and yields 4.6%. Some advisors also consider real estate an alternative. The Vanguard Real Estate ETF has a low expense ratio of 0.13% and a dividend yield of about 3.3%.
Finally, consider asset location—that is, where you hold your bonds. If they're in a taxable account, yields are subject to annual ordinary income taxes. "Bonds have no place in the taxable account of a high-bracket retiree," says Matthew Chancey, founder of Tax Alpha Cos. (Tax-free municipal bonds may be an exception.) With a traditional IRA, you're taxed only on the specific amount withdrawn to meet your needs for the year. That allows your taxable income to remain eligible for certain benefits while not triggering higher marginal tax rates or Medicare surcharges. B
Eventual Winners in The Biotech Sector
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To the Editor:
Lauren R. Rublin's article highlighting 16 biotech stocks with the potential to perform well in the near future was terrific ("Innovation Is Driving a New Bull Market in Biotech. 16 Ways to Play It, From Our Roundtable Experts," Cover Story, Sept. 25). It's an exciting area to watch, and I'm looking forward to seeing which of these companies ultimately delivers. I think I'm going to take a shot.
Martin Blumberg
Melville N.Y.
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Dan Fuss' Advice
To the Editor:
Dan Fuss certainly has the credentials (“The ‘Buffett of Bonds’ Hasn’t Retired Yet—and He Has Advice for These Tumultuous Times,” Income Investing, Sept. 25). He notes that “it would take a team of oxen to make me buy a 20-year bond.” Though he leans toward the five-year bond, another tenet is that he “favors bonds that go up in price.” The five-year isn’t there. What does this portend for preferred stocks and real estate investment trusts? These have an even greater negative correlation to rates than his hated 20-year bond. It would take something “stronger than a locomotive” for me to buy these sectors.
Harvey Rosen
Brooklyn, N.Y.
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Wait for Act Two
To the Editor:
The key difference between artificial intelligence and prior industrial revolutions is that AI could replace the mind as we know it (“The AI ‘Jobpocalypse’ Isn’t Happening. Here’s What the Data Actually Shows,” Sept. 23). It is first being sold for its efficiency, but we are only in the first act. Wait for Act Two, when the plot will start to reveal itself.
Joe Gulesserian
On Barrons.com
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AI Scams
To the Editor:
"How to Protect Your Retirement Savings From AI Scams and Cyber Threats" (Retirement, Sept. 23) raises questions about the safety of investor assets in these uncertain times. Of particular interest is the comment on diversifying the entities that hold these assets, such as brokerage firms, banks, et al. Your readers might find of further interest how these firms are protecting themselves, client data and assets, and clients themselves in the event of a natural or man-made interruption or disaster, and how long it might take to resume limited and/or normal operations. Art Horwitz
Naples, Fla.
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CORRECTIONS & AMPLIFICATIONS
When former Federal Reserve Chairman Paul Volcker pushed up interest rates, net interest expenses accounted for about 8% of total federal spending. Now they amount to \$1.2 trillion, or 14% of the total, more than military expenditure. In last week's Income Investing column, references to interest expenses were omitted.