UK hikes interest rates for second time in a decade

The United Kingdom got only its second interest rate hike in over a decade on Thursday. But it may be the last one for a long time.

The Bank of England raised its benchmark rate to 0.75% from 0.5% despite worries over the strength of the UK economy and uncertainty over Brexit.

The hike will make UK mortgages and loans more expensive, but should boost returns on cash tucked away in domestic savings accounts.

Some economists have raised doubts about the case for the rate hike.

Bank of England Governor Mark Carney has warned of dire economic consequences if Britain leaves the European Union in March 2019 without a comprehensive Brexit deal.

Bank of England governor Mark Carney has warned about the risks associated with Brexit.

Crashing out of the bloc without a deal could require the UK central bank to slash interest rates and introduce emergency measures in an effort to steady the financial system and wider economy.

The central bank acknowledged the risks on Thursday, saying in a statement that "any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent."

"The Monetary Policy Committee continues to recognize that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal," it added.

Central banks in many advanced economies have raised interest rates and moved to end stimulus programs as the global economy shakes off the lingering effects of the global financial crisis.

The US Federal Reserve has been steadily raising interest rates since late 2015. It held rates steady on Wednesday, but current plans involve at least two more hikes this year.

Hot High Tech Stocks To Invest In Right Now

tags:SILC,RELV,QRVO,DLTH,BGG,HP,

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In 2012, IBM finished the year with a market cap of $214 billion and an enterprise value of $205 billion. Its 12-month free cash flow in 2012 was $14.9 billion for an FCF yield of 7.3%

Today, IBM has a market cap and enterprise value of $143 billion and $169 billion, respectively. For the trailing 12 months, its free cash flow is $11.0 billion for an FCF yield of 6.5%.

Value investors look for 8% or higher, but given the 25% drop in its annual revenues over the last five years, 6.5% is pretty darn good.

Bottom Line on IBM Stock

As I said in my last article, IBM is doing a good job holding the line on free cash flow, which many investors consider to be the Holy Grail of financial metrics.

As long as it does that, I think it’s safe to assume that, at worst, IBM stock is fairly valued and worth considering as an investment given its dividend.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.

Hot High Tech Stocks To Invest In Right Now: Silicom Ltd(SILC)

Advisors' Opinion:

• [By ]

  Finally, Cramer said that Silicom (SILC) is an interesting concept with real earnings, and an attractive valuation at just 18 times earnings. However, the company is small, which mean investors need to be careful. 

• [By Joseph Griffin]

  F5 Networks (NASDAQ: FFIV) and Silicom (NASDAQ:SILC) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Hot High Tech Stocks To Invest In Right Now: Reliv' International Inc.(RELV)

Advisors' Opinion:

• [By Ethan Ryder]

  Headlines about Reliv International (NASDAQ:RELV) have trended somewhat positive recently, according to Accern. The research group ranks the sentiment of news coverage by monitoring more than 20 million blog and news sources in real time. Accern ranks coverage of publicly-traded companies on a scale of -1 to 1, with scores nearest to one being the most favorable. Reliv International earned a news sentiment score of 0.06 on Accern’s scale. Accern also assigned news articles about the company an impact score of 46.5816094320485 out of 100, indicating that recent news coverage is somewhat unlikely to have an impact on the company’s share price in the near future.

Hot High Tech Stocks To Invest In Right Now: Qorvo, Inc.(QRVO)

Advisors' Opinion:

• [By Joseph Griffin]

  Qorvo Inc (NASDAQ:QRVO) has been given a consensus recommendation of “Hold” by the twenty-seven analysts that are currently covering the firm, Marketbeat.com reports. Three equities research analysts have rated the stock with a sell rating, thirteen have given a hold rating and ten have given a buy rating to the company. The average 12-month price objective among brokerages that have issued ratings on the stock in the last year is $83.41.

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on Qorvo (QRVO)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Chris Lange]

  The S&P 500 stock posting the largest daily percentage gain ahead of the close was Qorvo, Inc. (NASDAQ: QRVO) which traded up over 5% at $81.71. The stock��s 52-week range is $63.59 to $86.84. Volume was about 2 million compared to the daily average volume of 1.4 million.

• [By Max Byerly]

  Fort Washington Investment Advisors Inc. OH trimmed its stake in shares of Qorvo (NASDAQ:QRVO) by 55.9% during the first quarter, Holdings Channel reports. The fund owned 5,956 shares of the semiconductor company’s stock after selling 7,553 shares during the quarter. Fort Washington Investment Advisors Inc. OH’s holdings in Qorvo were worth $420,000 as of its most recent SEC filing.

Hot High Tech Stocks To Invest In Right Now: Duluth Holdings Inc.(DLTH)

Advisors' Opinion:

• [By Max Byerly]

  Get a free copy of the Zacks research report on Duluth (DLTH)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Shane Hupp]

  Shares of Duluth Holdings Inc (NASDAQ:DLTH) reached a new 52-week high during mid-day trading on Thursday . The company traded as high as $23.60 and last traded at $23.54, with a volume of 43126 shares. The stock had previously closed at $22.52.

• [By Motley Fool Staff]

  Duluth Holdings (NASDAQ:DLTH) Q1 2018 Earnings Conference CallJun. 5, 2018 9:30 a.m. ET

  Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

  Operator

Hot High Tech Stocks To Invest In Right Now: Briggs & Stratton Corporation(BGG)

Advisors' Opinion:

• [By Lisa Levin]

  Check out these big penny stock gainers and losers

  Losers Check-Cap Ltd. (NASDAQ: CHEK) fell 23.3 percent to $9.87 in pre-market trading after declining 13.45 percent on Wednesday. SunCoke Energy Partners, L.P. (NYSE: SXCP) fell 12.8 percent to $16.00 in pre-market trading after reporting Q1 results. Briggs & Stratton Corporation (NYSE: BGG) fell 11 percent to $17.55 in pre-market trading after the company posted mixed Q3 results and lowered its FY18 guidance. New Gold Inc. (NYSE: NGD) fell 8.4 percent to $2.30 in pre-market trading following downbeat Q1 results. Quality Care Properties, Inc. (NYSE: QCP) fell 8.2 percent to $20.85 in pre-market trading. Welltower announced plans to acquire QCP for $20.75 per share in cash. China Customer Relations Centers Inc. (NASDAQ: CCRC) shares fell 7.5 percent to $17.25 in pre-market trading after climbing 18.73 percent on Wednesday. Nokia Corporation (NYSE: NOK) shares fell 5.7 percent to $5.58 in pre-market trading after reporting Q1 results. eBay Inc. (NASDAQ: EBAY) fell 5.6 percent to $38.66 in pre-market trading following Q1 results. Southw
• [By ]

  For his "Executive Decision" segment, Cramer spoke with Todd Teske, chairman, president and CEO of Briggs & Stratton (BGG) , the small-engine maker that posted a penny-a-share earnings beat on Wednesday, but saw shares fall 11% on lighter-than-expected revenues and a cut in the company's full-year guidance.

Hot High Tech Stocks To Invest In Right Now: Helmerich & Payne, Inc.(HP)

Advisors' Opinion:

• [By Garrett Baldwin]
  On Tuesday, the Trump administration said it would press ahead with 25% tariffs on roughly $50 billion in Chinese goods. As U.S. Trade Secretary Wilbur Ross prepares to head to Beijing to discuss trade this week, the Trump administration is demanding that China address ongoing theft of U.S. intellectual property. Ahead of Friday's jobs report, Automatic Data Processing (NYSE: ADP) reported that private jobs increased by 178,000 during May. That figure was actually 12,000 behind what the markets were anticipating. Job growth appears to be slowing down as the firm also revised its jobs figure for April downward, from 204,000 new positions to 163,000. Three Stocks to Watch Today: KORS, HP, KMI Michael Kors Holdings Ltd.�(NYSE: KORS) stock was off 3.2% in pre-market hours after the company reported earnings before the bell. The luxury retailer reported earnings per share (EPS) of $0.63, a figure that topped Wall Street expectations of $0.60. The firm also beat revenue expectations and reported an increase in same-store sales. However, the firm's earnings forecast for the year ahead came in lower than expectations, a factor that pushed its stock lower on Wednesday morning. Shares of HP Inc. (NYSE: HP) were up slightly after the company raised its full-year outlook and topped Wall Street earnings expectations on Tuesday. The company cited stronger demand in desktops and notebooks for its financial performance. The firm matched EPS expectations of $0.48. However, revenue came in at $14.0 billion, a figure that easily beat forecasts of $13.59. The Canadian government announced plans to purchase the Trans Mountain pipeline from Kinder Morgan Canada Ltd. (NYSE: KML) for $3.5 billion. The Canadian government said that the deal was the only way to ensure that the long-awaited project could proceed. The pipeline runs from the Alberta oil sands to a port all the way in British Columbia along the Pacific Ocean. The pipeline is designed to give Canadian crude grea
• [By Logan Wallace]

  Helmerich & Payne, Inc. (NYSE:HP) CFO Juan Pablo Tardio sold 52,781 shares of Helmerich & Payne stock in a transaction that occurred on Friday, May 18th. The stock was sold at an average price of $72.44, for a total value of $3,823,455.64. Following the completion of the sale, the chief financial officer now owns 25,628 shares of the company’s stock, valued at $1,856,492.32. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this link.

• [By Chris Johnson]

  Let me show you…

  I Love Helmerich & Payne Inc. (NYSE: HP) for This Coming Week

  My trading model is practically screaming to recommend this contract petroleum drilling company.

• [By Reuben Gregg Brewer]

  Energy-related stocks took a huge hit across the board when oil prices started to tumble in mid-2014. Some have come back strong; others are still reeling from the pain. If you're looking for bargains, then still-suffering stocks like ExxonMobil Corporation (NYSE:XOM), Holly Energy Partners, L.P. (NYSE:HEP), and Helmerich & Payne, Inc. (NYSE:HP) should all be on your short list. But are they worth buying today?

• [By ]

  Only 10% of the companies on the list had female CEOs at the helm, four of which -- Hewlett Packard (HP) , Lockheed Martin (LMT) , General Motors (GM) , and General Dynamics (GD) -- grew significant revenue in five years or less. 

Tech stumble a reminder to cut exposure to sector, analyst says

The latest stumble by tech stocks has one analyst reiterating her call to cut exposure to the sector.

��Large-cap tech stocks have suddenly started to fall and lag the S&P 500, amid disappointing 2Q results from some of the most crowded names in the sector within hedge funds and large-cap growth funds,�� said Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, in a Wednesday note.

She reiterated a call, first issued in April, to underweight U.S. large-cap tech stocks.

The most recent bout of volatility in the tech sector came in the wake of disappointing results of Facebook Inc. FB, -0.54% which slid more than 20% after reporting weaker-than-expected profits for the second quarter. A sharp 5.5% drop in the S&P 500 technology sector over the following three sessions brought the attention back to the sector as investors began to wonder whether its leadership is still necessary to keep the bull market alive.

Technology stocks led the steep selloff in February when the S&P 500 SPX, -0.10% fell more than 10%. They also led a selloff in late March and then in April, following negative headlines over Facebook Inc. FB, -0.54% and its relationship with Cambridge Analytica.

Read: How a tech meltdown could be contained

But despite warnings on soaring valuations and being the most crowded trade, the tech sector had rebounded over the past few months, hitting new all-time highs. Meanwhile, the broader market continues to trade below the records set in January.

On Wednesday, technology stocks rose 0.8%, boosted by upbeat earnings by Apple Inc. AAPL, +5.89% The tech sector�is up 13% since the start of the year, more than double of returns for the broader market.

Calvasina said that since the April downgrade, ��the case against tech has continued to build.��

Read: High-flying tech sector is vulnerable to deteriorating credit quality

Calvasina and her team noted that while the sector is still extremely crowded, there are signs that selling by institutional investors and fund managers has already begun.

��Our June investor survey results revealed that more institutional investors were looking to be sellers of tech and FANG than buyers,�� Calvasina wrote.

FAANG refers to Facebook Inc FB, -0.54% �Apple Inc AAPL, +5.89% �Amazon.com AMZN, +1.11% �Netflix Inc NFLX, +0.28% �and Google-parent Alphabet GOOG, +0.23% GOOGL, +0.47% �

Tech stocks are also expensive on both absolute and relative terms. Price-to-earnings and a more broader metric of enterprise valuations over earnings before taxes, interest, depreciation and amortization or EV/Ebitda are at the highest levels since the dot-com bubble.

The S&P 500 technology sector��s forward valuation, or the multiple paid for 12-month forward earnings, is currently at 18.7, compared with 16.6 for the broader S&P 500 index. Historically, when tech valuations outpaced the broader market on a relative basis, the sector underperformed 12 months later, according to Calvasina.

The reason the relative valuation matters is because lower multiples underpinned much of the sector��s big bull run after the financial crisis of 2008, as seen on the chart below. When relative valuation peaked and turn, subsequent returns were lower.

Another sign that the sector may be ripe for future underperformance is evident from ETF flows, she said.

��ETF flows to the sector appear to have peaked in the first quarter of 2018, as second-quarter inflows have paled in comparison. This tells us that an important underpinning of support for the tech trade is beginning to fade,�� Calvasina wrote.

The tech sector earnings continue to be healthy and generally better than expected, but the pace of beats and upward revisions is slowing down, according to Calvasina.

Indeed, a couple of high-profile disappointments, including Facebook and Netflix Inc. NFLX, +0.28% were enough to take the wind out of tech over last few sessions.

According to FactSet, the S&P 500 tech sector profit growth is expected to rise by 17% in 2018 and about 11% in 2019.

Finally, on the macro side, the tech sector that relies heavily to overseas revenues, is facing potential headwinds from the stronger U.S. dollar, much more so than other S&P 500 sectors.

The ICE U.S. Dollar Index DXY, -0.01% a measure of the currency against six major rivals, strengthened 2.6% since the start of the year to trade at about 94 and is likely to strengthen more when the Federal Reserve raise interest rates later this year.

��A stronger dollar raises the risk of downward earnings estimate revisions in the sector. This impact may be felt in the second half of 2018, when the greenback is poised to strengthen on a year over year basis,�� Calvasina wrote.

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Anora M. Gaudiano

Anora M. Gaudiano is a MarketWatch markets reporter based in New York.

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