The largest U.S. banks are scrutinizing members of the Federal Reserve for any insight into how the central bank will tinker interest rates.Banksread more
Facebook's cryptocurrency project has already been met with skepticism from policymakers around the world.Technologyread more
The U.S. and China restarted their trade talks, but signs are showing a comprehensive deal could be a long way off, if it happens at all.Marketsread more
Stone, 66, a notorious Republican political operative who has described himself as a "dirty trickster," had previously been dressed down by the judge for his public remarks...Politicsread more
The Biden team's second-quarter Federal Election Commission filing shows that the campaign wrote a check of just over $5,300 on June 28 to Sheehan Associates for "strategic...2020 Electionsread more
See which stocks are posting big moves after the bell on July 16.Market Insiderread more
While the vote served as a show of solidarity for Democrats, it recommended no substantive penalty against Trump.Politicsread more
United Airlines' second-quarter profit tops estimates but questions about the 737 Max linger.Airlinesread more
Three civil rights groups filed a federal lawsuit on Tuesday challenging the Trump administration's new asylum rule, which bars asylum claims from most noncitizens who travel...Politicsread more
Google VP of policy Karan Bhatia started sweating early as hearing chair Ted Cruz brings out an internal presentation created within the company.Technologyread more
At a hearing with the House Judiciary subcommittee on antitrust, an Amazon representative disputed a key argument about how it users sellers' data.Technologyread more
A dovish tilt from the Federal Reserve sent everything from stocks to bonds to gold rallying in unison, but stocks with this one feature are poised to crush the market after a rate cut, according to Goldman Sachs.
And that feature is low volatility. With muted price swings, low-volatility stocks tend to perform like bond proxies such as utilities and high-dividend payers. They have historically outperformed during the 12 months following the beginning of the Fed's rate cut cycles, according to Goldman's chief U.S. equity David Kostin.
"Low volatility stocks have outperformed significantly since the start of May as economic uncertainty and the odds of a Fed rate cut rose. In addition to monetary policy, intensifying trade rhetoric, slowing economic growth, and rising geopolitical tensions have dominated investor attention in recent weeks," Kostin said in a note Friday.
Because these placid stocks are also classic defensive plays, investors have been flocking to the group amid the intensifying trade war and signs of an economic slowdown. Two largest low-volatility exchange-traded funds — iShares Edge MSCI Min Vol ETF and Invesco S&P 500 Low Volatility ETF — have reeled in $8 billion of inflows this year, a quarter of total inflows to all U.S. equity ETFs, according to Goldman.
Goldman has a screen for low-volatility stocks and the basket has returned 7% since the start of May, beating the 's flat performance in the same period. The bank's picks include Warren Buffett's Berkshire Hathaway, Caterpillar, Chevron, eBay, Honeywell, Kimberly-Clark and Coca-Cola.
The Fed last week dropped the word "patient" in its statement and Fed chair Jerome Powell said the case for more accommodative policy has strengthened, causing traders to increase bets a cut is coming. They now see a 100% chance of at least a quarter-point cut next month, according to the CME FedWatch tool.
Goldman now sees two rate cuts this year as well as an early end to the balance sheet rolloff.
— With reporting by Michael Bloom