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(Bloomberg) — The stock market’s growth engine is running on fumes. For years, investors have counted on the biggest technology companies to power equity indexes higher based on their strong earnings and expectations for even more profits in the future, most recently fueled by the development of artificial intelligence services. Those days appear to be over, at least for now. And it’s forcing investors to think of other ways to play the latest equities bull market as it enters its third year. The issue is profits. The Magnificent Seven tech giants — Alphabet Inc., Amazon.com Inc., Apple Inc., Meta Platforms Inc., Microsoft Corp., Nvidia Corp. and Tesla Inc. — are expected to post a combined earnings increase of 18% in 2025, down from a projected 34% for 2024, according to data compiled by Bloomberg Intelligence. Strip out Nvidia, arguably the biggest beneficiary of Wall Street’s AI mania, the rest of the group is expected to post a measly 3% increase in profits in 2025. An 18% profit expansion is good news for just about any sector — but Big Tech. Should the estimate come to fruition, the high-flying cohort will fall behind health care in full-year earnings growth and not significantly above the materials and industrials groups. Meanwhile, the S&P 500 Index’s earnings growth is projected to reach 13% in 2025, up from 10% this year. In other words, the tech giants are no longer setting the pace for Corporate America. “The Mag Seven is not necessarily going to be the engine of growth for the market that it has been for the last year or so,” said Julian McManus, portfolio manager at Janus Henderson. Leaving Tech Investors are already responding. In the week through Dec. 4, the information technology group had its largest outflow in six weeks at $1.4 billion, according a Bank of America note on Friday citing data from EPFR Global. Small-cap stocks, which have been trailing the broader market this year, had $4.6 billion of inflows, putting them at an annualized record high of more than $30 billion. McManus said he’s watching for upside surprises in free cash flow growth and sees alternatives to Big Tech all over the world, not just in the US, where he’s “significantly underweight.” He likes energy producers, which are benefiting from power-thirsty data centers and are a popular play, and sees opportunities in biotech as well as chip design software companies like Cadence Design Systems Inc. A big part of the search for Big Tech alternatives is purely about their stock prices. Just this week, the Magnificent Seven companies traded at 41 times projected earnings, the highest valuation multiple since early 2022, according to data compiled by Bloomberg. The entire S&P 500 has seen a jump as well, with its ratio of 23 times the highest since 2021. But it’s still almost half the price of the tech giants’ valuations. “You’re being overly risky being in just the megacaps,” said Phil Blancato, chief executive officer at Ladenburg Thalmann Asset Management. “You’re looking at companies that are trading at valuations that are quite rich. Some of the numbers for the rest of the S&P 500 don’t look bad, they look good. I’d rather buy the rest of the S&P 500 at 18 times (forward earnings) versus the entire S&P 500 at 23 or 24 times.” He isn’t alone in his skepticism. Wall Street pros like Michael Wilson, chief US equity strategist at Morgan Stanley, and Brian Belski, chief investment strategist at BMO Capital Markets, also see the equities rally continuing to broaden to sectors beyond Big Tech, a trend that began in the second half of the year. “Euphoria around megacap tech is evident in growth expectations for the Magnificent 7 approaching all-time highs, just when their earnings are slated to decelerate,” Bank of America strategists led by Savita Subramanian wrote in a note to clients this week. With the cohort accounting for about a third of the S&P 500’s weighting, “we see more opportunity in the average stock than in the index,” the strategists wrote. Magnificent One However, that isn’t to say all Magnificent Seven stocks are created equal. Because there’s one company that stands head and shoulders above the rest: Nvidia. Relentless demand for its accelerators used in AI computing has sent earnings soaring. Nvidia is projected to deliver $71 billion in profits on revenue of $129 billion next year, up 49% and 52%, respectively, according to the average of analyst estimates compiled by Bloomberg. This explains why the stock is the seventh best performer in the Russell 1000 Index this year with a 193% gain — and the only Magnificent Seven company in the top 50. Much of Nvidia’s success is being driven by spending from its megacap peers. Microsoft, Alphabet, Amazon and Meta Platforms are projected to show more than $200 billion in combined 2024 capital spending to beef up computing capacity. And they’ve pledged to spend significantly more next year. That’s great for Nvidia, but investors are questioning when those investments will pay off for the rest. “I wouldn’t be surprised to see the Mag Seven sort of break up because gravity is going to catch up,” Janus Henderson’s McManus said. Of course, Wall Street has underestimated Big Tech’s strength in the past. At the start of 2024, analysts were projecting earnings growth of 19% for the Magnificent Seven, and the group is now on track for a 34% increase. And despite the numbers, the tech giants still retain their allure with investors, especially if the economy deteriorates. Scott Chronert, US equity strategist at Citigroup, likens the group to a defensive sector like consumer staples, whose products people need regardless of economic circumstances. The point being, megacaps remain a safe bet in uncertain times — like now. “If you were to sell big tech, where would you go?” said Andrew Choi, portfolio manager at Parnassus Investments. “Do you really want to bet on rate-sensitive stocks where you need rates to go a certain direction? Do you want to chase places that have done well? Big tech remains the best, easiest answer for what you want regardless of what market conditions end up being.” —With assistance from Ryan Vlastelica.Clinton presses past University High in Hardee's opener
Global Coordinate Measuring Machine Market Set For 9.6% Growth, Reaching $5.44 Billion By 2028The deputy first minister reiterated a promise to introduce legislation disqualifying lying politicians amid concerns about vexatious complaints and politicisation of the courts. Huw Irranca-Davies restated the pledge as he appeared before the Senedd’s standards committee to give evidence to an inquiry about accountability on December 2. Lee Waters questioned if the commitment, to a bill on disqualifying politicians found guilty of deception through an independent judicial process, will be kept by 2026. Mr Irranca-Davies warned of practical complexity in disqualifying candidates and Senedd members. Mr Irranca-Davies said any new legislation would need to be cognisant of freedom of expression, under Article 10 of the European Convention on Human Rights. The standards committee is weighing up recommendations including creating a criminal offence of deception, a civil offence, or strengthening the existing self-regulation system. Mick Antoniw, a former minister who gave the initial commitment to legislation to avert defeat in a Senedd vote, argued the standards committee sits as a quasi-judicial body. Turning to parliamentary privilege, which affords MPs immunity from legal challenge, Mr Irranca-Davies said the precious principle allows politicians to speak freely. In the Senedd, privilege is limited to defamation and contempt rather than absolute but moves are afoot to provide parity across the four nations. Calling for the standards process as a whole to be strengthened, he backed the introduction of a system of recall, which would allow voters to boot out Senedd members between elections He described the triggers used in Westminster: a custodial sentence for 12 months or less, a suspension of at least ten days or an expenses offence conviction: as a useful starting point. From 2026, people will vote for parties rather than individuals as the Senedd ditches the first-past-the-post system in favour of a full form of proportional representation. The next candidate on the political party’s list would be elected, with the public having no further say on who would replace a recalled Senedd member. The deputy first minister advocated a simple yes-no public vote on whether a politician should stay in office following a recommendation of recall from the standards committee.
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LOS ANGELES (AP) — Two-time Cy Young Award winner Blake Snell says it was a really easy decision to sign with the World Series champion Los Angeles Dodgers and the presence of three-time MVP Shohei Ohtani played a part, too. Read this article for free: Already have an account? To continue reading, please subscribe: * LOS ANGELES (AP) — Two-time Cy Young Award winner Blake Snell says it was a really easy decision to sign with the World Series champion Los Angeles Dodgers and the presence of three-time MVP Shohei Ohtani played a part, too. Read unlimited articles for free today: Already have an account? LOS ANGELES (AP) — Two-time Cy Young Award winner Blake Snell says it was a really easy decision to sign with the World Series champion Los Angeles Dodgers and the presence of three-time MVP Shohei Ohtani played a part, too. Snell was introduced Tuesday at Dodger Stadium accompanied by his agent Scott Boras. The left-hander finalized a $182 million, five-year contract last Saturday. “It was really easy just cause me and Haeley wanted to live here, it’s something we’ve been talking about for a while,” Snell said, referring to his girlfriend. “Then you look at the team. You look at what they’ve built, what they’re doing. It’s just something you want to be a part of.” Last month, Snell opted out of his deal with San Francisco to become a free agent for the second consecutive offseason after he was slowed by injuries during his lone year with the San Francisco Giants. Snell gets a $52 million signing bonus, payable on Jan. 25, and annual salaries of $26 million, of which $13.2 million each year will be deferred. Because Snell is a Washington state resident, the signing bonus will not be subject to California income tax. “It just played out the way that people around me felt comfortable with, I felt comfortable with, they felt comfortable with,” Snell said. “We talked and found something that could work for both of us. You want your worth, you want your respect, and you want enough time to where you can really make a name for yourself. I’ve made a name for myself outside of LA, but I’m going to be invested.” Two-way star Ohtani, who signed a record $700 million, 10-year deal a year ago, had a historic first season with the Dodgers. He helped them win the franchise’s eighth World Series while playing only as designated hitter and became MVP in the National League for the first time after twice winning the award while in the American League. “It helps with him in the lineup for sure. That’s big motivation,” Snell said. “You want to be around players like that when you’re trying to be one of the best in the game. Yeah, it played a big part.” Snell joins Ohtani and fellow Japanese right-hander Yoshinobu Yamamoto atop Los Angeles’ rotation. All-Star Tyler Glasnow will be back after having his first season in LA derailed by a sprained elbow. Ohtani didn’t pitch this year while recovering from right elbow surgery but is expected back on the mound in 2025. The rest of the rotation includes Tony Gonsolin, Landon Knack, Dustin May, Bobby Miller and Emmet Sheehan. “I pitched on six-man, five-man, four-man rotations,” Snell said. “I’m good with it all as long as we have a plan, we’ll execute it.” Snell, who turns 32 on Wednesday, went 5-3 with a 3.12 ERA in 20 starts this year, throwing a no-hitter at Cincinnati on Aug. 2 for one of only 16 individual shutouts in the major leagues this season. He struck out 145 and walked 44 in 104 innings. He was sidelined between April 19 and May 22 by a strained left adductor and between June 2 and July 9 by a strained left groin. Snell won Cy Young Awards in 2018 with Tampa Bay and 2023 with San Diego. He is 76-58 with a 3.19 ERA in nine seasons with the Rays (2016-20), Padres (2021-23) and Giants. He has known Andrew Friedman, Dodgers president of baseball operations, since he was 18. In the aftermath of winning the World Series and discussing how the Dodgers could repeat next year, Friedman said, “All conversations kept coming back to Blake.” Winnipeg Jets Game Days On Winnipeg Jets game days, hockey writers Mike McIntyre and Ken Wiebe send news, notes and quotes from the morning skate, as well as injury updates and lineup decisions. Arrives a few hours prior to puck drop. “Usually in major league free agency, you’re buying the backside of a guy’s career, the accomplishments that they have had,” he said. “With Blake, one thing that’s really exciting for us is, as much success as he’s had, we feel like there’s more in there.” Snell was 2-2 against the Dodgers in his career. “We couldn’t beat him, so we’re going to have him join us,” Friedman said. .___ AP MLB: https://apnews.com/hub/MLB Advertisement AdvertisementBest Boxing Day deals from Amazon Australia: Retailer launches December 26 deals earlyNorthwestern hopes hot streak continues vs. Northeastern
PANAMA CITY (AP) — Teddy Roosevelt once declared the Panama Canal “one of the feats to which the people of this republic will look back with the highest pride.” More than a century later, is threatening to take back the waterway for the same republic. Related Articles The president-elect is Panama has imposed to use the waterway linking the Atlantic and Pacific oceans. He says if things don’t change after he takes office next month, “We will demand that the Panama Canal be returned to the United States of America, in full, quickly and without question.” Trump has long threatened allies with punitive action in hopes of winning concessions. But experts in both countries are clear: Unless he goes to war with Panama, Trump can’t reassert control over a canal the U.S. agreed to cede in the 1970s. Here’s a look at how we got here: It is a man-made waterway that uses a series of locks and reservoirs over 51 miles (82 kilometers) to cut through the middle of Panama and connect the Atlantic and Pacific. It spares ships having to go an additional roughly 7,000 miles (more than 11,000 kilometers) to sail around Cape Horn at South America’s southern tip. The U.S. International Trade Administration says the canal saves American business interests “considerable time and fuel costs” and enables faster delivery of goods, which is “particularly significant for time sensitive cargoes, perishable goods, and industries with just-in-time supply chains.” An effort to establish a canal through Panama led by Ferdinand de Lesseps, who built Egypt’s Suez Canal, began in 1880 but progressed little over nine years before going bankrupt. Malaria, yellow fever and other tropical diseases devastated a workforce already struggling with especially dangerous terrain and harsh working conditions in the jungle, eventually costing more than 20,000 lives, by some estimates. Panama was then a province of Colombia, which refused to ratify a subsequent 1901 treaty licensing U.S. interests to build the canal. Roosevelt responded by dispatching U.S. warships to Panama’s Atlantic and Pacific coasts. The U.S. also prewrote a constitution that would be ready after Panamanian independence, giving American forces “the right to intervene in any part of Panama, to re-establish public peace and constitutional order.” In part because Colombian troops were unable to traverse harsh jungles, Panama declared an effectively bloodless independence within hours in November 1903. It soon . Some 5,600 workers died later during the U.S.-led construction project, to one study. The waterway opened in 1914, but almost immediately some Panamanians began questioning the validity of U.S. control, leading to what became known in the country as the “generational struggle” to take it over. The U.S. abrogated its right to intervene in Panama in the 1930s. By the 1970s, with its administrative costs sharply increasing, Washington spent years negotiating with Panama to cede control of the waterway. The Carter administration worked with the government of Omar Torrijos. The two sides eventually decided that their best chance for ratification was to submit two treaties to the U.S. Senate, the “Permanent Neutrality Treaty” and the “Panama Canal Treaty.” The first, which continues in perpetuity, gives the U.S. the right to act to ensure the canal remains open and secure. The second stated that the U.S. would turn over the canal to Panama on Dec. 31, 1999, and was terminated then. Both were signed in 1977 and ratified the following year. The agreements held even after 1989, when President George H.W. Bush invaded Panama to remove Panamanian leader Manuel Noriega. In the late 1970s, as the handover treaties were being discussed and ratified, polls found that about half of Americans opposed the decision to cede canal control to Panama. However, by the time ownership actually changed in 1999, public opinion had shifted, with about half of Americans in favor. Administration of the canal has been more efficient under Panama than during the U.S. era, . Panama’s voters approved a 2006 referendum authorizing a major expansion of the canal to accommodate larger modern cargo ships. The expansion took until 2016 and cost more than $5.2 billion. Panamanian President said in a video Sunday that “every square meter of the canal belongs to Panama and will continue to.” He added that, while his country’s people are divided on some key issues, “when it comes to our canal, and our sovereignty, we will all unite under our Panamanian flag.” Shipping prices have increased because of droughts last year affecting the canal locks, forcing Panama to drastically cut shipping traffic through the canal and raise rates to use it. Though the rains have mostly returned, Panama says future fee increases might be necessary as it undertakes improvements to accommodate modern shipping needs. Mulino said fees to use the canal are “not set on a whim.” Jorge Luis Quijano, who served as the waterway’s administrator from 2014 to 2019, said all canal users are subject to the same fees, though they vary by ship size and other factors. “I can accept that the canal’s customers may complain about any price increase,” Quijano said. “But that does not give them reason to consider taking it back.” The president-elect says the U.S. is getting “ripped off” and “I’m not going to stand for it.” “It was given to Panama and to the people of Panama, but it has provisions — you’ve got to treat us fairly. And they haven’t treated us fairly,” Trump said of the 1977 treaty that he said “foolishly” gave the canal away. The neutrality treaty does give the U.S. the right to act if the canal’s operation is threatened due to military conflict — but not to reassert control. “There’s no clause of any kind in the neutrality agreement that allows for the taking back of the canal,” Quijano said. “Legally, there’s no way, under normal circumstances, to recover territory that was used previously.” Trump, meanwhile, hasn’t said how he might make good on his threat. “There’s very little wiggle room, absent a second U.S. invasion of Panama, to retake control of the Panama Canal in practical terms,” said Benjamin Gedan, director of the Latin America Program at the Woodrow Wilson International Center for Scholars in Washington. Gedan said Trump’s stance is especially baffling given that Mulino is a pro-business conservative who has “made lots of other overtures to show that he would prefer a special relationship with the United States.” He also noted that Panama in recent years has moved closer to China, meaning the U.S. has strategic reasons to keep its relationship with the Central American nation friendly. Panama is also a U.S. partner on stopping illegal immigration from South America — perhaps Trump’s biggest policy priority. “If you’re going to pick a fight with Panama on an issue,” Gedan said, “you could not find a worse one than the canal.”