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The Swiss stock exchange SIX is exploring the possibility of establishing a cryptocurrency trading platform in Europe, aiming to compete with established digital asset firms like Binance, OKX and Coinbase.
What Happened: The move reflects growing institutional interest in digital assets, particularly as traditional investors seek a reputable and regulated environment to trade cryptocurrencies.
Bjørn Sibbern, the global head of exchanges at SIX Group, highlighted the increasing acceptance of crypto as a legitimate asset class.
"Crypto has become more and more a recognized asset class," Sibbern told the Financial Times.
He explained that SIX is considering building a platform to facilitate both spot and derivatives crypto trading.
This initiative could capitalize on Switzerland's robust regulatory framework for digital assets, positioning it as a key player in the European market.
While some traditional finance institutions have been cautious about entering the crypto space due to regulatory uncertainties and concerns about reputational risks, a few prominent firms have ventured into the sector.
For instance, Deutsche Boerse, Nomura and Standard Chartered have launched their own crypto exchanges, often separate from their core operations.
However, not all efforts have succeeded.
CBOE Global Markets closed its spot crypto exchange earlier this year, citing unclear regulations, and CME Group explored Bitcoin trading but has since shelved those plans.
The approval of spot Bitcoin and Ethereum exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission earlier this year has sparked increased interest from both retail and institutional investors.
This influx has raised expectations that more investors will seek to trade cryptocurrencies directly.
Although Bitcoin's price has dipped from its all-time high of $72,000 to around $60,000, it remains up by 40% this year, showing resilience in the market.
Switzerland has emerged as one of Europe's most crypto-friendly nations, boasting comprehensive laws around the trading and custody of digital assets.
These regulations provide clarity on the classification of various types of tokens, something many other countries have yet to implement.
www.benzinga.com/events/digital-assets
Also Read: Bitcoin Surges 5.3% Ahead Of Fed’s Key Rate Decision: This Cut Could ‘Cause Uncertainty’
This regulatory advantage could make Switzerland an attractive hub for institutional crypto trading.
Sibbern noted that SIX is evaluating multiple avenues for growth in Europe, with crypto being a potential addition.
"We are looking at other ways for us to expand in Europe and as a part of that, we are also looking at [whether] crypto should be a part of it," he said, emphasizing that the platform would target institutional investors, such as asset managers. He further added, "We see the trend that more and more global banks and institutions are looking at crypto."
SIX already operates a crypto derivatives platform, AsiaNext, based in Singapore in partnership with Japan's SBI Group.
Sibbern mentioned that the company is contemplating a similar initiative in Europe, although the project is still under evaluation.
"We are looking at should we do something similar in Europe," Sibbern said, acknowledging that the company might ultimately decide not to proceed with the venture.
In addition to exploring crypto trading, SIX operates a separate digital exchange, which has seen the listing of nine digital bonds since 2018, with issuers including UBS and the city of Lugano.
Sibbern indicated that this digital exchange could potentially be expanded to encompass cryptocurrency trading as well, marking a significant evolution for the Swiss group.
This exploration into cryptocurrency trading comes at a time when SIX's traditional exchanges have experienced notable successes, hosting two of Europe's largest IPOs this year — Spanish beauty company Puig and dermatology firm Galderma.
As the digital asset space continues to evolve, industry stakeholders are gearing up for Benzinga's Future of Digital Assets event on Nov. 19, where experts and institutional players will gather to discuss the latest trends and developments in the crypto landscape.
Read Next:
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
For Immediate Release
Chicago, IL – September 18, 2024 – Today, Zacks Equity Research discusses Intercontinental Exchange ICE, CME Group CME, Nasdaq Inc. NDAQ, Cboe Global Markets CBOE and MarketAxess MKTX.
Industry: Securities and Exchanges
Link: https://www.zacks.com/commentary/2337271/5-securities-and-exchanges-stocks-to-watch-amid-market-volatility
Compelling and diversified product portfolios help drive revenues of Zacks Securities and Exchanges industry players. An increase in trading volumes, product expansion through prudent acquisitions and the increased adoption of a greater number of crypto assets are expected to benefit Intercontinental Exchange, CME Group, Nasdaq Inc., Cboe Global Markets and MarketAxess .
Increased focus on accelerating their non-trading revenue base, which comprises market technology, listing and information revenues, infuses dynamism in the business profile of the industry players. However, alterations in investment patterns and priorities, and compliance with regulations pose challenges. Also, the highly volatile crypto market experienced a downturn recently, affecting the performance of the companies.
About the Industry
The Zacks Securities and Exchanges industry comprises companies that operate electronic marketplaces, which facilitate the buying and selling of stocks, stock options, and bonds or commodity contracts. They facilitate trading across a diverse range of products in multiple asset classes and geographies.
The companies generate revenues from fees received from the listed companies on their exchanges. They also provide a range of data and listing services to global financial and commodity markets, including pricing and reference data, exchange data, analytics, feeds, index services, investments, risk management, desktops, and connectivity solutions, as well as corporate and ETF listing services, on the cash equity exchanges of the industry players. The industry is witnessing increased adoption of crypto assets. Yet, complying with a number of regulations result in challenges.
3 Trends Shaping the Future of the Securities and Exchanges Industry
Volatility Fueling Trading Volume: The players in the industry are largely dependent on product and service portfolios for revenues. Major services include trade execution, clearing, settlement services for securities and commodity contracts, listing services, plus trading and clearing systems services. Sustainable trading volume growth, driven by trading volatility, fuels transaction and clearing fees (a major component of the top line of industry players).
The maximization of transaction and clearing fees and the lowering of transaction-based expenses drive profits. Other revenue sources include data products and financial indexes, along with information and public company services. Increasing focus on accelerating the non-trading revenue base, which includes market technology, listing and information revenues, infuses dynamism in the business profiles of the industry participants.
Mergers and Acquisitions: The industry continues to witness mergers and acquisitions, with companies evaluating opportunities to supplement their internal growth story by forging strategic alliances or acquiring businesses or technologies. These enable them to penetrate untapped markets, offer new products or services and enhance the value of their platforms and existing trade-related operations.
Additionally, strategic buyouts lead to a diversified product portfolio (the primary growth catalyst) and help industry participants maintain their domestic market share, as well as fortify their global footprint. Also, exchanges are pursuing consolidations and mergers with technological, legal, and competitive changes, per Deloitte.
Continuous Investment in Technology: Industry players continue to invest heavily in technological development. Focus on building a strategic economic market model via technological advancements and upgrades of products and services, AI in particular, will help all exchanges stay afloat amid changing industry dynamics.
In recent years, the players have launched a number of innovative technologies that rely on machine learning, automation and algorithms designed to improve trading decisions while reducing trading inefficiencies, cyber threats and human errors, thus accelerating trading frequency. Players are also investing in automating non-trading operations that play an important part in revenue generation for the companies.
Zacks Industry Rank Indicates Bleak Prospects
The Zacks Securities and Exchanges industry is housed within the broader Zacks Finance sector. It carries a Zacks Industry Rank #158, which places it in the bottom 37% of the 251 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, reflects dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts have been losing confidence in this group’s earnings growth potential. Estimates for the current year have declined 0.5% in a year.
Before we present a few securities and exchanges stocks worth considering for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Underperforms Sector and S&P 500
The Zacks Securities and Exchanges industry has underperformed the broader Zacks Finance sector as well as the Zacks S&P 500 composite over the past year. The industry has gained 20.5% compared with the broader sector and the Zacks S&P 500 composite’s increase of 25.7% each in the said time frame.
Industry's Current Valuation
On the basis of trailing 12-month price-to-book (P/B), which is commonly used for valuing finance stocks, the industry is currently trading at 3.6X compared with the S&P 500’s 8.55X and the sector’s 3.75X.
Over the last five years, the industry has traded as high as 4.01X, as low as 2.38X and at the median of 3.27X.
5 Securities and Exchanges Stocks to Keep an Eye On
We are presenting five Zacks Rank #3 (Hold) stocks from the Securities and Exchanges industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nasdaq: Headquartered in New York, Nasdaq is a leading provider of trading, clearing, marketplace technology, regulatory, securities listing, information, and public and private company services. Its strategy of accelerating its non-trading revenue base, successfully maximizing opportunities as a technology and analytics provider, and growing core marketplace businesses, as well as intensifying its focus on Market Technology and Information Services businesses, should continue to drive growth.
The Zacks Consensus Estimate for 2025 earnings per share indicates an increase of 12.8% year over year. NDAQ came up with a four-quarter average earnings surprise of 3.39%. The expected long-term earnings growth rate is pegged at 8.9%, better than the industry average of 8.5%. The consensus estimate for 2024 and 2025 earnings has moved 1.9% and 1.6% north, respectively, in the past 60 days.
Intercontinental Exchange: This Atlanta, GA-based company is a leading global operator of regulated exchanges, clearing houses and listings venues and a provider of data services for commodity, financial, fixed-income and equity markets. Its compelling portfolio, expansive risk-management services, strategic buyouts and a solid balance sheet bode well. It is the second-largest global fixed-income provider. ICE, with the largest mortgage network across the United States, remains well poised to benefit from accelerated digitization in the U.S. residential mortgage industry.
The Zacks Consensus Estimate for Intercontinental Exchange’s 2024 and 2025 EPS indicates a year-over-year rise of 7.5% and 10.5%, respectively. It came up with a four-quarter average earnings surprise of 2.35%. The expected long-term earnings growth is pegged at 9.4%, better than the industry’s average. The consensus mark for 2024 and 2025 has moved 0.8% and 0.5% north, respectively, in the past 60 days.
Cboe Global Markets: Based in Chicago, IL, Cboe Global is one of the largest stock exchange operators by volume in the United States and globally for ETP trading. The company is poised for growth, given an expanding product line across asset classes, broadening geographic reach and a diversifying business mix with recurring revenues and technology.
The Zacks Consensus Estimate for the company’s 2024 and 2025 EPS indicates year-over-year increases of 10.5% and 5.5%, respectively. The expected long-term earnings growth is pegged at 13.8%, better than the industry’s average. It came up with a four-quarter average surprise of 5.01%. The consensus mark for 2024 and 2025 has moved 1.1% and 0.2% north, respectively, in the past 60 days.
CME Group: Headquartered in Chicago, IL, CME Group boasts the largest futures exchange in the world in terms of trading volume as well as notional value traded. Efforts to expand futures products in emerging markets, non-transaction-related opportunities, OTC offerings, cross-selling through alliances, strong global presence and solid liquidity should drive this company’s growth.
The Zacks Consensus Estimate for the company’s 2024 EPS indicates a year-over-year increase of 6.4%. It came up with a four-quarter average earnings surprise of 3.55%. The expected long-term earnings growth rate is pegged at 2.5%. The consensus mark for 2024 and 2025 has moved 1.5% and 0.7% north, respectively, in the past 60 days.
MarketAxess: Based in New York, MarketAxess is a leading multi-dealer trading platform. Growing commissions, solid credit trading volume, the extensive reach of the Open Trading platform, acquisitions and a notable financial position continue to drive growth.
The Zacks Consensus Estimate for 2024 and 2025 earnings per share indicates an increase of 3.1% and 12.8%, respectively, year over year. MarketAxess came up with a four-quarter average earnings surprise of 2.63%. The expected long-term earnings growth rate is pegged at 6%. The consensus mark for 2024 and 2025 has moved 2 cents north each in the past 60 days.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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800-767-3771 ext. 9339
support@zacks.com
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release
Zacks Investment Research
Compelling and diversified product portfolios help drive revenues of Zacks Securities and Exchanges industry players. An increase in trading volumes, product expansion through prudent acquisitions and the increased adoption of a greater number of crypto assets are expected to benefit Intercontinental Exchange ICE, CME Group CME, Nasdaq Inc. NDAQ, Cboe Global Markets CBOE and MarketAxess MKTX. Increased focus on accelerating their non-trading revenue base, which comprises market technology, listing and information revenues, infuses dynamism in the business profile of the industry players. However, alterations in investment patterns and priorities, and compliance with regulations pose challenges. Also, the highly volatile crypto market experienced a downturn recently, affecting the performance of the companies.
About the Industry
The Zacks Securities and Exchanges industry comprises companies that operate electronic marketplaces, which facilitate the buying and selling of stocks, stock options, and bonds or commodity contracts. They facilitate trading across a diverse range of products in multiple asset classes and geographies. The companies generate revenues from fees received from the listed companies on their exchanges. They also provide a range of data and listing services to global financial and commodity markets, including pricing and reference data, exchange data, analytics, feeds, index services, investments, risk management, desktops, and connectivity solutions, as well as corporate and ETF listing services, on the cash equity exchanges of the industry players. The industry is witnessing increased adoption of crypto assets. Yet, complying with a number of regulations result in challenges.
3 Trends Shaping the Future of the Securities and Exchanges Industry
Volatility Fueling Trading Volume: The players in the industry are largely dependent on product and service portfolios for revenues. Major services include trade execution, clearing, settlement services for securities and commodity contracts, listing services, plus trading and clearing systems services. Sustainable trading volume growth, driven by trading volatility, fuels transaction and clearing fees (a major component of the top line of industry players). The maximization of transaction and clearing fees and the lowering of transaction-based expenses drive profits. Other revenue sources include data products and financial indexes, along with information and public company services. Increasing focus on accelerating the non-trading revenue base, which includes market technology, listing and information revenues, infuses dynamism in the business profiles of the industry participants.
Mergers and Acquisitions: The industry continues to witness mergers and acquisitions, with companies evaluating opportunities to supplement their internal growth story by forging strategic alliances or acquiring businesses or technologies. These enable them to penetrate untapped markets, offer new products or services and enhance the value of their platforms and existing trade-related operations. Additionally, strategic buyouts lead to a diversified product portfolio (the primary growth catalyst) and help industry participants maintain their domestic market share, as well as fortify their global footprint. Also, exchanges are pursuing consolidations and mergers with technological, legal, and competitive changes, per Deloitte.
Continuous Investment in Technology: Industry players continue to invest heavily in technological development. Focus on building a strategic economic market model via technological advancements and upgrades of products and services, AI in particular, will help all exchanges stay afloat amid changing industry dynamics. In recent years, the players have launched a number of innovative technologies that rely on machine learning, automation and algorithms designed to improve trading decisions while reducing trading inefficiencies, cyber threats and human errors, thus accelerating trading frequency. Players are also investing in automating non-trading operations that play an important part in revenue generation for the companies.
Zacks Industry Rank Indicates Bleak Prospects
The Zacks Securities and Exchanges industry is housed within the broader Zacks Finance sector. It carries a Zacks Industry Rank #158, which places it in the bottom 37% of the 251 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, reflects dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts have been losing confidence in this group’s earnings growth potential. Estimates for the current year have declined 0.5% in a year.
Before we present a few securities and exchanges stocks worth considering for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Underperforms Sector and S&P 500
The Zacks Securities and Exchanges industry has underperformed the broader Zacks Finance sector as well as the Zacks S&P 500 composite over the past year. The industry has gained 20.5% compared with the broader sector and the Zacks S&P 500 composite’s increase of 25.7% each in the said time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of trailing 12-month price-to-book (P/B), which is commonly used for valuing finance stocks, the industry is currently trading at 3.6X compared with the S&P 500’s 8.55X and the sector’s 3.75X.
Over the last five years, the industry has traded as high as 4.01X, as low as 2.38X and at the median of 3.27X, as the chart below shows.
Price-to-Book (P/B) Ratio (TTM)
Price-to-Book (P/B) Ratio (TTM)
5 Securities and Exchanges Stocks to Keep an Eye On
We are presenting five Zacks Rank #3 (Hold) stocks from the Securities and Exchanges industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nasdaq: Headquartered in New York, Nasdaq is a leading provider of trading, clearing, marketplace technology, regulatory, securities listing, information, and public and private company services. Its strategy of accelerating its non-trading revenue base, successfully maximizing opportunities as a technology and analytics provider, and growing core marketplace businesses, as well as intensifying its focus on Market Technology and Information Services businesses, should continue to drive growth.
The Zacks Consensus Estimate for 2025 earnings per share indicates an increase of 12.8% year over year. NDAQ came up with a four-quarter average earnings surprise of 3.39%. The expected long-term earnings growth rate is pegged at 8.9%, better than the industry average of 8.5%. The consensus estimate for 2024 and 2025 earnings has moved 1.9% and 1.6% north, respectively, in the past 60 days.
Price and Consensus: NDAQ
Intercontinental Exchange: This Atlanta, GA-based company is a leading global operator of regulated exchanges, clearing houses and listings venues and a provider of data services for commodity, financial, fixed-income and equity markets. Its compelling portfolio, expansive risk-management services, strategic buyouts and a solid balance sheet bode well. It is the second-largest global fixed-income provider. ICE, with the largest mortgage network across the United States, remains well poised to benefit from accelerated digitization in the U.S. residential mortgage industry.
The Zacks Consensus Estimate for Intercontinental Exchange’s 2024 and 2025 EPS indicates a year-over-year rise of 7.5% and 10.5%, respectively. It came up with a four-quarter average earnings surprise of 2.35%. The expected long-term earnings growth is pegged at 9.4%, better than the industry’s average. The consensus mark for 2024 and 2025 has moved 0.8% and 0.5% north, respectively, in the past 60 days.
Price and Consensus: ICE
Cboe Global Markets: Based in Chicago, IL, Cboe Global is one of the largest stock exchange operators by volume in the United States and globally for ETP trading. The company is poised for growth, given an expanding product line across asset classes, broadening geographic reach and a diversifying business mix with recurring revenues and technology.
The Zacks Consensus Estimate for the company’s 2024 and 2025 EPS indicates year-over-year increases of 10.5% and 5.5%, respectively. The expected long-term earnings growth is pegged at 13.8%, better than the industry’s average. It came up with a four-quarter average surprise of 5.01%. The consensus mark for 2024 and 2025 has moved 1.1% and 0.2% north, respectively, in the past 60 days.
Price and Consensus: CBOE
CME Group: Headquartered in Chicago, IL, CME Group boasts the largest futures exchange in the world in terms of trading volume as well as notional value traded. Efforts to expand futures products in emerging markets, non-transaction-related opportunities, OTC offerings, cross-selling through alliances, strong global presence and solid liquidity should drive this company’s growth.
The Zacks Consensus Estimate for the company’s 2024 EPS indicates a year-over-year increase of 6.4%. It came up with a four-quarter average earnings surprise of 3.55%. The expected long-term earnings growth rate is pegged at 2.5%. The consensus mark for 2024 and 2025 has moved 1.5% and 0.7% north, respectively, in the past 60 days.
Price and Consensus: CME
MarketAxess: Based in New York, MarketAxess is a leading multi-dealer trading platform. Growing commissions, solid credit trading volume, the extensive reach of the Open Trading platform, acquisitions and a notable financial position continue to drive growth.
The Zacks Consensus Estimate for 2024 and 2025 earnings per share indicates an increase of 3.1% and 12.8%, respectively, year over year. MarketAxess came up with a four-quarter average earnings surprise of 2.63%. The expected long-term earnings growth rate is pegged at 6%. The consensus mark for 2024 and 2025 has moved 2 cents north each in the past 60 days.
Price and Consensus: MKTX
Zacks Investment Research
Designed to provide broad exposure to the Financials - Broad segment of the equity market, the Invesco S&P 500 Equal Weight Financials ETF (RSPF) is a passively managed exchange traded fund launched on 11/01/2006.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Financials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
Index Details
The fund is sponsored by Invesco. It has amassed assets over $271.83 million, making it one of the average sized ETFs attempting to match the performance of the Financials - Broad segment of the equity market. RSPF seeks to match the performance of the S&P 500 EQUAL WEIGHT FINANCIALS INDEX before fees and expenses.
The S&P 500 Equal Weight Financials Index equally weights stocks in the financial sector of the S&P 500 Index.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.41%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector--about 100% of the portfolio.
Looking at individual holdings, Cboe Global Markets Inc (CBOE) accounts for about 1.60% of total assets, followed by Truist Financial Corp (TFC) and Globe Life Inc (GL).
The top 10 holdings account for about 15.42% of total assets under management.
Performance and Risk
So far this year, RSPF has gained about 14.40%, and is up about 29.31% in the last one year (as of 09/12/2024). During this past 52-week period, the fund has traded between $48.10 and $68.77.
The ETF has a beta of 1.05 and standard deviation of 13.82% for the trailing three-year period. With about 72 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight Financials ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, RSPF is a great option for investors seeking exposure to the Financials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Vanguard Financials ETF (VFH) tracks MSCI US Investable Market Financials 25/50 Index and the Financial Select Sector SPDR ETF (XLF) tracks Financial Select Sector Index. Vanguard Financials ETF has $9.80 billion in assets, Financial Select Sector SPDR ETF has $43.50 billion. VFH has an expense ratio of 0.10% and XLF charges 0.09%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Zacks Investment Research
Chicago, Illinois-based Cboe Global Markets, Inc. operates as an exchange holding company. Valued at $22.2 billion by market cap, the company operates a financial options trading platform that provides cutting-edge trading and investment solutions, including equities, foreign exchange, indices, data and analytics, and trade reporting solutions.
Shares of this leading provider of market infrastructure and tradable products have outperformed the broader market over the past year. CBOE has gained 37.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 26.1%. However, in 2024, CBOE’s stock rose 17.1%, compared to SPX’s 17.2% rise on a YTD basis.
Zooming in further, CBOE also outperformed the iShares U.S. Broker-Dealers & Securities Exchanges ETF . The exchange-traded fund has gained about 34% over the past year and returned 16.2% on a YTD basis.
CBOE’s solid price performance can be attributed to higher trading volumes in index options, increased revenue from transaction and clearing fees, and growth in market data and access fees.
On Aug. 2, CBOE shares closed up more than 4% after reporting its Q2 earnings results. Its adjusted EPS increased 20.8% year over year to $2.15. Its revenue stood at $513.8 million, up 10%. The company reaffirmed fiscal 2024 guidance and expects its adjusted operating expense to be between $795 and $805 million and organic total net revenue growth to be between 6% and 8%.
For the current fiscal year, ending in December, analysts expect Cboe Global Markets’ EPS to grow 10.6% to $8.63 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters. Moreover, the company surpassed its consensus EPS estimate by 1.9% in the previous quarter.
Among the 16 analysts covering CBOE stock, the consensus is a “Moderate Buy.” That’s based on five “Strong Buy” ratings and 11 “Holds.”
With no “Strong Sell” ratings, this configuration appears more bullish than it did just a month ago.
On Aug. 5, Piper Sandler Companies analyst Patrick Moley reiterated a “Buy” rating on CBOE with a price target of $210.
While CBOE currently trades above its mean price target of $200.20, the Street-high price target of $230 suggests an upside potential of 10%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores?
The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value Score
Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth Score
Growth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum Score
Momentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM Score
If you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank
A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only as a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Based in Chicago, IL, and founded in 1973, Cboe Global Markets, Inc. (effective Oct 17, 2017, CBOE Holdings, Inc. came to be known as Cboe Global Markets, Inc.) is one of the largest stock exchange operators by volume in the United States and a leading market globally for ETP trading.
CBOE is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Finance stock. CBOE has a Momentum Style Score of A, and shares are up 13% over the past four weeks.
For fiscal 2024, six analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.11 to $8.62 per share. CBOE boasts an average earnings surprise of 5%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, CBOE should be on investors' short list.
Zacks Investment Research
The SEC has reportedly raised questions about whether Solana should be classified as a security, potentially leading to a halt in filings related to its exchange-traded funds.
What Happened: The SEC held discussions with ETF applicants and communicated concerns over Solana’s status as a security, as reported by The Block on Monday.
After these discussions, the SEC and exchange operator Cboe Global Markets Inc. decided not to submit the 19b-4 forms to the Federal Register, which would have started the approval process. This action prevents the SEC from being pressured to make decisions about the prospective Solana ETFs.
The SEC didn’t immediately respond to Benzinga’s request for comment on the matter.
Why It Matters: Over the weekend, it was observed that the 19b-4 filings, typically submitted by exchanges on behalf of issuers, are no longer visible on the Cboe website.
The filing of the 19b-4 document was the second step in getting ETFs greenlighted, following the submission of S-1 documents by VanEck and 21Shares in late June.
Amid the speculations, Matthew Sigel, the Head of Digital Assets Research at VanEck, lent support to SOL, stating that the asset manager considers SOL a commodity, like Bitcoin and Ethereum .
matthew sigel, recovering CFA@matthew_sigelAug 19, 2024For the record, VanEck believes SOL is a commodity, much like BTC and ETH. This belief is informed by evolving legal perspectives, where courts and regulators have begun to recognize that certain crypto assets may function as securities in primary markets but behave more like...
Earlier this month, Brazil approved its first-ever Solana ETFs, paving the way for mainstream investors to gain exposure to the price moves of the world’s fifth-largest cryptocurrency.
Price Action: At the time of writing, SOL was unaffected, rising 2.72% in the last 24 hours, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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