All posts by PARKERYL

Written by the Market Insights Team

A worrying sign

Kevin Ford –FX & Macro Strategist

During a press conference yesterday, President Trump confirmed that tariffs on Canada and Mexico are ‘on time and on schedule’ to begin on March 4^th, following the one-month pause. Markets are still hesitant to fully price in the threats and aren’t anticipating the tariffs will be imposed. Don’t be surprised if Trump lifts the tariff until the very last minute, as he did previously.

We’ve been trying to make sense of all the noise and commentary from President Trump. Initially, the tariffs were seen as a bargaining tool or a way to reduce the US deficit, but as time goes on, the motivation becomes clearer. Trump’s recent post on Social Truth spells trouble for Canada. It remains unclear whether the tariffs will apply only to Canada and Mexico, to steel and aluminum, to reciprocal tariffs, or to all of these. However, as the debt ceiling agreement deadline approaches on March 14^th, the Trump administration is expected to push for its tax cut agenda, which includes revenue projections from tariffs and fiscal spending cuts from the newly established Department of Government Efficiency (DOGE).

The revenue projections from tariffs come from Commerce Secretary Howard Lutnick, who claimed that reciprocal tariffs could generate $700 billion annually. Also, Kevin Hassett, the director of the National Economic Council, estimated that a 10% levy on Chinese imports could yield between $500 billion and $1 trillion over 10 years. While Republicans see tariffs as a significant revenue source, these numbers alone seem far fetched from a macro point of view and will face challenges in congressional hearings.

So far, the US Senate has passed its $340 billion border bill, which excludes tax cuts. Meanwhile, the House is advocating for a single comprehensive bill that incorporates tax extensions and border spending. This bill has advanced through the Budget Committee, but only after making concessions to fiscal conservatives.  The proposed bill is an extension of the 2017 tax cuts, which according to the proposed numbers, could cost $4.8 trillion over the next 10 years.

Starting the week, the Loonie began testing upward resistance levels at 1.425. In the absence of significant news, as we get closer to March 4^th, it could again face upward pressure, pushing it to test the 20, 60, and 40-day SMAs resistance zone between 1.43 and 1.435.

Dip buyers save the day

Boris Kovacevic – Global Macro Strategist

Yesterday’s market session was split into two distinct phases, as investors began the week by selling risk assets amid growing concerns of a U.S. slowdown. Recession fears intensified following weaker-than-expected leading indicators from the Chicago and Dallas Federal Reserves. U.S. equities fell, bond yields plunged, and the dollar followed suit, pressured by deteriorating sentiment.

However, dip buyers stepped in during the U.S. session, helping equities and the Greenback recover some losses. Overall, the impact of the day’s news and data appeared to be net-neutral for markets. That said, recent growth concerns could become a bigger problem for risk assets if soft economic data persists, making secondary indicators increasingly important to monitor.

The dollar ended the day slightly lower after briefly touching its weakest level since mid-December. As we highlighted in our feature for Fortune, the dollar remains under pressure for two key reasons: the absence of new tariffs reducing safe-haven demand and the Fed’s pause being linked to rising inflation expectations rather than strong macro data. With recent data reaffirming these trends, the dollar has struggled to benefit from steady rates, currently sitting at its lowest level this year, down 3.4% from January’s peak.

For a meaningful rebound, dollar bulls will need either stronger U.S. economic data or renewed tariff enforcement by Trump. The latter could materialize today, as Trump reiterated overnight that tariffs on Canadian and Mexican goods will be implemented once the delay expires.

New government, old problems

Boris Kovacevic – Global Macro Strategist

The euro briefly climbed above $1.05, reaching its highest level in nearly a month before retreating to $1.0460. Investors see the potential for increased fiscal spending, particularly in defense, as a way to support economic activity. However, fiscal constraints may limit the impact, as political hurdles complicate efforts to boost spending. Meanwhile, business sentiment is showing cautious optimism, though immediate economic conditions remain subdued. We will continue to monitor political developments and key macro releases, as they will play a crucial role in shaping EUR/USD’s near-term direction.

Following the German election outcome, Chancellor-designate Friedrich Merz is actively engaging with the Social Democrats (SPD) to accelerate defense spending in response to escalating geopolitical tensions. However, the rise of fringe parties, securing a minority with blocking rights, has complicated efforts to amend the constitutional “debt brake”, which restricts government borrowing. To navigate these constraints, Merz is considering pushing reforms through the current parliament before the new session begins on March 24. These political maneuvers have added uncertainty to the euro’s performance, as markets assess their potential economic impact.

On the macro front, the Ifo Institute’s latest survey indicates a modest improvement in business expectations, with the index rising to 85.4 in February, up from 84.3 in January, and exceeding forecasts of 85.0. However, current conditions worsened, highlighting that while businesses are hopeful about the future, they continue to struggle with present challenges.

Pound running into resistance

Boris Kovacevic – Global Macro Strategist

The pound climbed to a nine-week high of $1.2690 before encountering resistance near $1.27. Strong UK data and persistent inflation in recent weeks continue to provide support, leaving room for further gains—especially if U.S. economic momentum slows in parallel.

However, geopolitical risks remain a key factor. Trump’s tariff agenda, while not directly targeting the UK, could disrupt global trade flows, particularly with China and the eurozone, leading to potential spillover effects for Britain. Meanwhile, elevated UK inflation still supports GBP, but a renewed rise in gilt yields—back toward January highs—could shift rate expectations from a tailwind to a headwind if fiscal concerns resurface.

This morning, the pound is trading in the lower $1.26 area, as a risk-off mood takes hold following Trump’s overnight comments. The administration is set to raise tariffs on major trading partners and is considering further restrictions on China’s access to advanced chips, adding fresh uncertainty to markets.

Dollar continues to decline

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: February 24-28

All times are in ET

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

New CuNi commemorative collectors’ type in normal and colour version:

“Red Arrows“

TECHNICAL DATA
Composition: copper-nickel
Diameter: 27.30 mm
Weight: 8.00 g
Mint: The Royal Mint



Silver and gold proof coins have been issued as well.

LINK: The Royal Mint

Guest Post On February 25th, 2025 by Tom Hutchinson, Chief Analyst, Cabot Dividend Investor

We’ve been spoiled by a booming bull market over the past two years. The S&P 500 posted two consecutive years of better than 20% returns in 2023 and 2024 for the first time in 26 years.

As a result, more subdued returns are possible in 2025.

At the same time, the artificial intelligence boom continues. And the bull market is still young by historical standards.

But stocks are expensive. The overall price/earnings ratio for the S&P is well above the ten-year average. Then there’s interest rates. Interest rates are likely to stay higher for longer than previously expected as the economy remains strong, and inflation is proving sticky.

Investors will have to balance between the benefits of stronger growth and the realization that interest rates probably won’t fall to the degree stocks have already somewhat priced in.

That okay. It’s normal and healthy for a bull market to take a bit of a breather while earnings catch up. And more subdued returns put a greater emphasis on dividends, which provide a greater portion of total return in a flatter market.

We tend to forget all about dividends when stocks are flying. But they may play a much bigger role in your overall return in 2025.

One of the best places on the market for dividends is energy stocks. The payouts are among the highest anywhere. And energy is in the spotlight.

With this in mind, Sure Dividend has compiled a list of nearly 80 energy stocks (along with important investing metrics such as dividend yields), available for download below:

 

The Trump administration will pursue vastly different energy policies than the previous administration. A mainstay of the new economic strategy is to unleash domestic fossil fuel production to its fullest extent. The regulatory environment is likely to become far friendlier and encouraging for more oil and gas activity.

Of course, the policies may not be good for many energy company stocks. More production of oil and gas means lower prices. Lower energy prices mean lower profits for commodity-sensitive companies.

But there is one area in the energy realm where the new policy approach is positive: midstream energy.

Midstream energy companies are involved in the middle stages of the energy chain between production and final sale to end users. They gather, process, transport, store, and export oil and gas.

A key differentiator is that revenue is primarily generated by collecting fees for such services, and they are not reliant on commodity prices.

They are toll collectors on the energy highway that benefit from more oil and gas sloshing around the county, which is a good bet going forward.

The best-positioned midstream companies deal in natural gas, the fastest-growing fossil fuel. Sure, clean energy is the wave of the future, but not for a while. The U.S. currently relies on fossil fuels for 79% of its energy needs.

Fossil fuels are expected to remain the dominant energy source for decades to come. Natural gas is the bridge to the future. It is more abundant and cheaper than oil and coal, and it is much cleaner.

Demand for natural gas is strong and getting stronger. It’s the number one fuel source for electricity generation. It’s also the supplement of choice for clean energy, that kicks in when the sun goes in, and the wind stops blowing. The U.S. is the world’s number one producer of natural gas and international demand for exports is strong and growing.

And there’s something else – artificial intelligence. The massive AI catalyst doesn’t just affect high-flying chip companies. Its wake ripples through many aspects of the economy. A major side effect of the new technology is rapidly rising electricity demand.

AI generation sucks up massive amounts of electricity. Data centers (special facilities that house computers and related components) involve sophisticated cooling, back-up, and fire suppression systems.

Large data centers require as much electricity as a small town. And that was before AI. Data centers that house AI components require three times as much electricity as a traditional data center.

As a result, electricity demand is expected to skyrocket in the years ahead, beyond what the current grid can provide. There will be capacity expansion. And natural gas is the number one fuel source for electricity generation. The higher demand will require pipelines of natural gas and expansion opportunities for midstream energy companies.

Most midstream energy companies that deal in natural gas had a stellar year in 2024 while the overall energy sector floundered. These companies also provide high dividend yields.

Here are two of the best midstream natural gas companies on the market.

Midstream Natural Gas Dividend Stock: ONEOK Inc. (OKE)

ONEOK is a large U.S. midstream energy company specializing in natural gas. It owns one of the nation’s premier natural gas liquids (NGLs) systems connecting NGL supply in the Rocky Mountains, Midcontinent, and Permian regions in key market centers.

It also has an extensive network of natural gas gathering, processing, storage, and transportation assets.

Here are some things to like about the stock.

• Investment-grade rated debt
• 85% of earnings are fee-based
• 28 years of stable and growing dividends
• C corporation structure (generates a 1099, not a K-1)

The high-yielding and reliable revenue generator provided a 48.5% total return in 2024 and an 85% return over the last three years. There should be good times ahead as well.

ONEOK recently acquired two midstream companies, Enlink Midstream (ENLC) and Medallion Midstream, which are accretive to earnings immediately. The growing earnings combined with highly favorable industry dynamics should make OKE a winner in 2025.

Midstream Natural Gas Dividend Stock: The Williams Companies Inc. (WMB)

Williams is involved in the transmission, gathering, processing, and storage of natural gas. It operates the large Transco and Northwest pipeline systems that transport gas to densely populated areas from the Gulf to the East Coast. Roughly 30% of the natural gas in the U.S. moves through William’s systems.

Like most other midstream energy companies, the overwhelming bulk of earnings are guaranteed by long-term contracts. And those contracts have automatic inflation adjustments built in.

It also operates a near monopoly in its areas and doesn’t have to compete in price with other similar companies. As a large and established player, it can easily grow with network expansion.

The company continues to raise future earnings guidance as business is booming. WMB also had a stellar 2024 as investors anticipate the growth in natural gas. It returned a whopping 59% for the year. But WMB still trades below the all-time high in 2014 with much higher earnings now.

Additional Reading

Additionally, see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.

Trump tariffs and consumer confidence weigh on Wall Street … hope you didn’t sell your AI energy stocks … how to adjust your risk with position sizing

This morning, Wall Street moved lower after two headlines weighed on investors.

First, President Trump announced that tariffs on products from Mexico and Canada are back on.

Here’s CNBC:

President Donald Trump said that sweeping U.S. tariffs on imports from Canada and Mexico “will go forward” when a monthlong delay on their implementation expires next week.

“The tariffs are going forward on time, on schedule,” Trump said when asked at a White House press conference if the postponed tariffs on the two U.S. trading partners would soon go back into effect.

Products from Mexico and Canada will face a 25% levy, plus 10% duties on Canadian energy.

For investors and consumers, tariffs raise fears of a resurgence of inflation. And that dovetails into our next story – February’s downbeat consumer confidence report.

Here’s MarketWatch:

Consumer confidence [has sunk to an] 8-month low on worries about inflation and Trump tariffs. The decline was the third in a row since the index hit a 16-month peak of 112.8 in November…

Americans also said it was harder to get a job and they were more worried about their incomes.

Put these headlines together and Wall Street is unhappy. All three major indexes were down sharply earlier today with the Nasdaq off nearly 2% at one point.

The good news is that stocks are well off their lows of the morning.

Consider using this tech selloff as a shopping opportunity

I hope you didn’t sell your AI energy stocks back in January when the news of DeepSeek broke…

As you’ll recall, the emergence of the Chinese low-cost AI platform sent Wall Street into a panic.

The fear was that DeepSeek’s groundbreaking low-cost technology meant that the tsunami of AI investment capital that everyone anticipated wouldn’t materialize. And that meant saying “goodbye” to all those earnings-juiced, super-bullish stock price projections.

Not so much.

Here’s the Wall Street Journal:

Despite a brief period of investor doubt, money is pouring into artificial intelligence from big tech companies, national governments and venture capitalists at unprecedented levels.

Before we dive into why, let’s back up.

In the days following DeepSeek’s arrival, our experts Louis Navellier, Eric Fry, and Luke Lango urged investors not to bail on AI

While they believed the leaderboard could change slightly, they agreed that DeepSeek’s low-cost technology would be bullish for AI, not bearish, thanks to Jevons Paradox.

This economic principle suggests that AI at lower cost will result in more total AI spending, not less, because more companies will be able to pay for AI. So, while the cost-per-unit of AI could drop dramatically, total AI spend would explode higher.

Now, Jevons Paradox is happening. We are seeing certain AI costs drop dramatically, leading to greater demand.

But at the same time, the bleeding edge of AI technologies are still coming at a high price tag along with enormous energy demand. To understand why, it’s important to recognize that technology is moving away from traditional large language models (LLM); it’s now moving toward reasoning models and AI agents.

For a good explanation, let’s go back to the WSJ:

Reasoning models, which are based on large language models, are different in that their actual operation consumes many times more resources, in terms of both microchips and electricity…

DeepSeek caused a panic of sorts because it showed that an AI model could be trained for a fraction of the cost of other models, something that could cut demand for data centers and expensive advanced chips.

But what DeepSeek really did was push the AI industry even harder toward resource-intensive reasoning models, meaning that computing infrastructure is still very much needed.

So, how much more “resource-intensive” are these reasoning models?

Here’s Kari Briski, Nvidia’s vice president of product management:

On tasks like generating complex, customized code for developers, this AI reasoning process can take multiple minutes, or even hours — and can easily require over 100x compute for challenging queries compared to a single inference pass on a traditional LLM.

Back to the WSJ for how this is likely to affect overall demand:

In January, it appeared that the cost per token [of AI development] —in both computing power and dollars—would crash in the wake of the release of DeepSeek R1…

On its face, this would seem to indicate that AI’s future demand for computing power would be some fraction of its current amount—say, a tenth, or even less.

But the increase in demand from reasoning models…could more than make up for that.

If…reasoning models become the standard and increase demand for those models by a factor of 100, that’s still a 10-fold increase in future demand for power for AI.

This is just the starting point. As businesses are discovering that the new AI models are more capable, they’re calling on them more and more often. This is shifting demand for computing capacity from training models toward using them.

The WSJ goes on to profile a company that provides AI computing resources to other companies. Here’s its CEO commenting on AI costs and overall demand:

For one customer, we brought their costs down probably 60% six months ago, and within three months, they were already consuming at a higher level than they were consuming initially.

Bottom line: Unless your investment time horizon is less than a year or so (we’ll circle back to you in a moment), ignore the risk of a market correction. Diversify your picks (chipmakers, components suppliers, energy plays, and so on) but invest and then just hang on.

If you’re more risk averse, consider investing a small starter position from which you’ll dollar-cost-average over time (adding to your position in equal dollar increments at regular intervals going forward so that you average out your overall cost basis).

If you’d like help with which stocks to add to your portfolio, our macro expert Eric just identified several that are set to benefit from artificial general intelligence. They’re in his special reports: My 3 Top AGI Stocks for 1,000%Gains and The AI Dominators. To learn how to access these reports, click here.

I’ll wrap up this section with the following quote from Tomasz Tunguz, venture capitalist and the founder of Theory Ventures:

Every keystroke in your keyboard, or every phoneme you utter into a microphone, will be transcribed or manipulated by at least one AI.

And if that’s the case, the AI market could soon be 1,000 times larger than it is today.

How to remain in the AI trend if you can’t stomach the coming ups and downs

In Friday’s Digest, I noted that not everyone has a decade-long investment horizon.

Frankly, not everyone has a one-year investment horizon.

If you’re in that boat – or if you’re a more conservative investors – how do you invest in AI without too much exposure to market risk?

In Friday’s Digest, I highlighted an entry/exit timing tool from our corporate partner, TradeSmith. It uses historical market data to create a unique volatility thumbprint for any given stock.

This proprietary “Volatility Quotient” (VQ) reading helps investors know how much volatility is normal and to be expected. And that can inform an investor about when it’s time to get out of a position… and eventually, back in.

But you can use this VQ reading in a second way – to detail exactly how much money to invest based on your specific risk tolerance.

Circling back to today’s AI megatrend, let’s say you find a stock you want to buy, but you have a fixed amount of money you’re willing to risk losing. We can use the VQ reading again, yet with another tool – a Position Size Calculator.

Here’s TradeSmith’s CEO Keith Kaplan:

In our TradeSmith system, we offer something called a Position Size Calculator. It has three different scenarios for how to buy a stock.

1. You could say, “I want to risk $1,000; how much of this stock should I buy?”
2. Or let’s say you have a $100,000 portfolio. You could say, “I’d like to risk 2% of my portfolio; how much should I buy?”
3. And finally, you could say, “I want to buy this stock with equal risk to the stocks in my portfolio; how much should I buy?”

This tool is VERY user friendly, and it’s set to walk you through the perfect position sizing for your portfolio in less than a minute.

Based on the amount of money you’re willing to risk on an AI stock, the Position Size Calculator would tell you the exact position size to take relative to the unique volatility of your chosen stock.

Many investors don’t realize how much these details affect your market performance. Here’s Keith:

Your position size matters a LOT. Don’t get it wrong.

Don’t buy too much of a risky stock and not enough of a low-risk stock.

You must find (and keep!) the right blend to maximize your potential gains while lowering your risk.

Keith is holding a live event this Thursday at 8 PM ET that provides a walk-through of these TradeSmith market tools.

He’ll also introduce a new technological breakthrough, demoing it for the first time. This “MQ Algorithm” is designed to detect and model market melt-ups mathematically. And even though the market is selling off as I write, this MQ algorithm is signaling a melt-up for a subset of stocks.

From Keith:

To be clear, I do think now is the time to buy stocks – but you want to make sure you’re buying the right ones at the right time.

On Thursday at 8 p.m. Eastern, I’m going to share the biggest prediction in my company’s 20-year history. One that will likely have you eager to buy stocks as well.

It’s free to attend. All you have to do is register for The Last Meltup, right here.

We’ll keep you updated on all these stories here in the Digest.

Have a good evening,

Jeff Remsburg

Written by the Market Insights Team

A rolling one-month threat

Kevin Ford –FX & Macro Strategist

The blueprint of a threat, followed by a deadline extension, was on display yesterday, as the presumed March 4^th deadline for Canada and Mexico might now be pushed back to early April. The Eurozone also faced a new round of tariff threats from President Trump, capping the EUR/USD at 1.05. As highlighted in previous Daily Market Updates (DMU), speculation is rife about another push towards April 2^nd, aligning with the deadline President Trump set for his cabinet to assess reciprocal tariffs and global trade relations.

Since inauguration day, trade policy has been a rollercoaster of uncertainty. It’s now unclear whether the steel and aluminum tariffs, initially set to begin on March 12^th, will also be postponed to April 2^nd. For now, the FX markets will believe in tariffs only when they see them.

The Loonie has encountered resistance at the 1.435 level, as flight-to-quality persists in the US markets amid widespread uncertainty. From macroeconomic data to fiscal spending cuts, debt ceiling negotiations, US-Russia relations, and the burgeoning relationship between the Chinese government and the mega tech industry, investors face a myriad of questions with no clear playbook for navigating these uncertain times.

As a result, the fear index, or the VIX, has been up and down between the alarming 20 levels and 17. Nvidia’s strong quarterly earnings have provided a measure of relief to the markets, amid the prevailing uncertainty and doubts about the sustainability of AI momentum in corporate America.

The uncertainty has particularly impacted the crypto market, causing a sell-off that has wiped out around $400 billion in market capitalization over the last few days. BTC/USD is now trading at 86,000, significantly below its all-time high of 106,146.

Equities rattled, currencies calm

George Vessey – Lead FX & Macro Strategist

There’s growing confusion around the timing and scale of tariffs to be implemented by the US administration following US President Donald Trump’s cabinet meeting on Wednesday. Trump said that the 25% tariffs on Mexico and Canada would be implemented on April 2, rather than the looming March 4 date. It wasn’t clear if the president meant that he was giving the countries additional time, or got confused with a separate program. Either way, the slew of contradictions has stoked investor skepticism over Trump’s policy agenda.

Equity markets have been rattled in the wake of the ongoing twists and turns in the tariff narrative, with US equities having now wiped out the initial post-election burst. But currencies appear to be taking it in their stride a little more, with realised volatility in G10 FX shrinking of late. Aside from tariff uncertainty, the growth-scare narrative in the US has worsened, which has led to risk-off market conditions . A combination of weaker growth and disinflationary forces will encourage further interest rate cuts at the Federal Reserve (Fed), with markets now pricing two 25 basis point cuts for the year, whereas the expectation was for just one cut two weeks ago.

Meanwhile, in the commodities space, oil prices are trading a multi-month lows having lost around 4% this month as Trump’s aggressive moves on trade triggered anxiety at a time when oil traders were already concerned about lackluster consumption in China. Moreover, hopes for a potential Russia-Ukraine peace deal weighed on the market, as lifting Russian sanctions could increase global oil supply. Commodity FX thus remains under pressure with the Aussie and Canadian dollars trading softer.

Tariff threats losing sting on euro

George Vessey – Lead FX & Macro Strategist

The euro retreated from a one-month high of $1.0528, whilst Germany’s 10-year bond yield fell to 2.44%, near a one-week low, as doubts emerged over a swift increase in European defense spending and its funding through bond issuance. Meanwhile, economic data showed German consumer sentiment unexpectedly weakened heading into March. Plus, US President Trump fired another round of tariff threats overnight, but it hasn’t rattled the euro like one might have expected.

EUR/USD continues to knock on the door of $1.05 but the 100-day moving average located just above this level remains a strong barrier to the upside. Nevertheless the euro appears relatively calm after the latest bout of tariff threats, falling only 50 pips on the news. Trump stated he intends to impose duties of 25% on the European Union without giving any further details on whether those would affect all exports from the bloc or only certain products or sectors. Meanwhile, Germany’s incoming chancellor, Friedrich Merz, ruled out a swift reform of the country’s borrowing limits and said it was too early to determine whether the outgoing parliament could approve a major military spending increase.

Investors will be monitoring the trade and fiscal policy developments closely, but on the macro front today, Spanish inflation data could prove important for clues on where the Eurozone figure will land next week ahead of the European Central Bank (ECB) meeting. Markets expect another 25 basis point rate cut and about 82 bps of ECB easing in total this year. The spread between US and German 10-year yields closed at 181 basis points on Wednesday, near the narrowest since October. It’s set for the biggest monthly decline since May, which has helped support the euro’s modest rebound over the past month.

Sterling’s double edged sword

George Vessey – Lead FX & Macro Strategist

Due to higher interest rates in the UK relative to other G10 peers, the pound’s elevated carry status increases its exposure to equity market fluctuations. The modest uplift in equity markets helped the pound inch higher versus the euro and US dollar on Wednesday, with the former trading just shy of the €1.20 handle. GBP/EUR is up over 1% month-to-date, but is flat on the year, whilst GBP/USD is up over 2% month-to-date and near its highest in two months.

The pound’s yield advantage can be a blessing and a curse though. When markets are in risk-on mode – investors happy to take on more risk for more reward – sterling tends to appreciate, but in deteriorating global risk conditions, the pound becomes more vulnerable. This is amplified by the UK’s worsening net international investment position and persistent current account deficit, which leaves GBP reliant on foreign capital inflows. With this in mind, if we see a bigger drawdown in equity markets, expect the pound to tumble too. Several warning signals are rearing their ugly heads on this front, including bearish investor sentiment surveys and a surge in demand for protection against a stock-market correction.

We can also look at 1-month implied-realized volatility spreads in the FX space to gauge whether the market expects future volatility to be greater than what has been observed historically. From this, we can see traders are paying up for protection in safe havens like the Japanese yen and Swiss franc as they look to hedge against potential shocks from trade policy, geopolitics and political uncertainty.

Dollar index holds in top 5% of 7-day range

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: February 24-28

All times are in ET

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

Buy-now-pay-later offers SMEs an alternate credit source.

Although generally available in the consumer market for about a decade, the electronic payment model of buy-now-pay-later (BNPL) is finally bearing fruit for micro, small and midsize enterprises (MSMEs) by avoiding interest payments on corporate credit cards, reducing paperwork, facilitating quicker transactions, and improving liquidity management.

The business-to-business (B2B) BNPL transaction works similarly to the business-to-consumer (B2C) BNPL transaction. After a third party runs a credit check and assumes the credit risk of non-payment, a purchaser can delay payment for a fixed period or pay in whole or installments.

Using B2B BNPL, MSMEs avoid tapping their credit lines to pay invoices and avoid trade credit negotiations. For suppliers, it works like reverse factoring, where the buyer uses a third party to pay the invoice immediately and reimburses the financing third party later.

Many MSMEs in sectors like retail, manufacturing and technology have become early adopters of B2B BNPL, according to Arjun Singh, partner and global head of fintech, financial services practice at Arthur D. Little (ADL). “Additionally, marketplaces are increasingly incorporating B2B BNPL as part of their embedded finance and financial innovation strategies, helping businesses address liquidity challenges and streamline payment processes.”

On the other hand, B2B BNPL is a sleeping giant that is ready to awaken. It is driven by larger and often more complex transactions. The authors of a viewpoint published by ADL estimated that B2B BNPL would capture 15% to 20% of all B2B payments by the decade’s end.

“This would equal approximately $25-$30 trillion BNPL volume and, assuming average BNPL fees of 3%-4% per transaction, a total addressable market between $700 billion and $1.3 trillion,” they wrote.

Geographically, BNPL is a global phenomenon available in approximately 80 markets, with the Asia-Pacific markets leading adoption in China and South Asia, such as Malaysia, Indonesia and Singapore, according to Vaidya. “After that, we have seen a lot more applicability in Europe because the immediate payment access is better. In the US, there have been many new BNPL providers.”

Where Credit Is Due

The BNPL model would not function without third parties taking on the non-payment credit risk. Fintechs—such as Sweden’s Klarna, Australia’s Afterpay, and America’s Affirm—blazed a path for the B2C BNPL space, capturing considerable market share while expanding their offerings.

Nonetheless, Capgemini’s Vaidya notes that banks will likely dominate the B2B BNPL market.

“Klarna and Afterpay have a lot of retail customers, individuals who are buying in malls and big box retailers or on an e-commerce online shop,” he says. “Banks are doing better in the small and midsize enterprise segment.”

While fintechs continue to crack into the B2B market, banks already have existing financial relationships with MSMEs and their suppliers and offer them another way to provide credit to their commercial customers. This is especially true for businesses with revenues in the $20-$50 million range and had difficulty obtaining small-ticket loans historically.

However, financial institutions’ results are not all rosy. The B2B BNPL business comes at the cost of commercial credit card fees and those generated by a bank’s factoring and reverse factoring business lines.

“In the past, a business would go and buy something on its commercial credit card, and a bank would generate a fee on the transaction,” explains Vaidya. “When an immediate account-to-account payment option is possible, they can pay their suppliers directly where they didn’t need credit. So the banks need to do something.”

The banks have gone big with their B2B BNPL offerings. Global banking giants Banco Santander and BNP Paribas began offering their respective BNPL services to their large multinational clients in 2023 via partnerships with payment platforms and trade insurance providers. Banco Santander Corporate Investment Bank launched its turnkey service, which incorporates the payment platform from net-terms infrastructure provider Two and the services of insurance broker Marsh Spain and credit-insurance provider Allianz Trade.

“The fact that buyers have to use personal or corporate credit cards is still hindering B2B transactions. Enabling businesses to maintain their payment habits within 30 or 60 days of their invoices in an e-commerce environment will be a big differentiator for sellers while adding a major game changer: all concerns about non-payment risk are now removed, and their cash flow is preserved at all times,” said Ignacio Frutos Lopez, global head receivables at Banco Santander CIB at the time of the launch.

Three months later, BNP Paribas launched its service in partnership with Hokodo, a B2B payment platform provider that can integrate with existing checkout platforms via an API. The service provides real-time credit decisions, transaction financing, credit and fraud insurance, and collection capabilities.

Moving Forward

Despite its potential remarkable growth, B2B BNPL still has a few hurdles to overcome. According to the authors of the ADL viewpoint, customer awareness and regulation are the leading concerns, followed by risk assessment, product structures, cross-border trade issues, technology integration, costs and competition.

“A significant portion of the target market needs to be educated about the benefits and risks of the proposition,” says ADL’s Singh.

According to research by Capgemini, BNPL’s expected adoption rate will remain flat for the next couple of years. In a study of e-commerce shares by checkout method, BNPL garnered a 5% share in 2023 and is forecasted to have a 5% share in 2027. Meanwhile, credit cards, which had a 22% share in 2023, are predicted to shrink to a 15% share over the same period.

As the size of the entire BNPL market increases, regulators are investing more effort in addressing BNPL offerings as separate from typical longer-term interest-bearing loans. However, according to Eric Mitzenmacher, a partner at the law firm Mayer Brown, BNPL-specific regulation remains nascent in many jurisdictions.

“The US—despite being a fertile market for BNPL offerings due to the size of its economy and certain helpful regulatory factors—has one of the more complex and rapidly evolving regulatory environments for BNPLs,” he says. “Many other jurisdictions currently have more permissive environments for BNPL, particularly for BNPLs offered to SMEs versus consumers, with the potential exception of BNPLs offered by banks and similarly regulated financial institutions.”

Singh agrees, saying, “Unlike consumer credit, which has a relatively uniform regulation across jurisdictions, business lending and credit regulations are diverse and fragmented, lacking the same clarity—especially in cross-border scenarios.”

Even with these hurdles, Singh expects B2B BNPL to have a similar adoption curve as its consumer counterpart and gain traction across multiple sectors and transaction types. “As commerce continues to unify across channels and customers demand greater personalization, the reach and impact of B2B BNPL will expand significantly, offering businesses increased flexibility and financial options.”

Updated on February 25th, 2025 by Bob Ciura

The “Dogs of the Dow” investing strategy is a very simple way for investors to achieve diversification and income in their portfolios while remaining in the sphere of more conservative blue chip stocks.

The strategy consists of investing in the 10 highest-yielding stocks in the Dow Jones Industrial Average, an index of 30 U.S. stocks.

High dividend stocks are stocks with a dividend yield well in excess of the market average dividend yield of ~1.3%. With that in mind, we have created a free list of over 200 high dividend stocks with dividend yields above 5%.

You can download your copy of the high dividend stocks list below:

 

The “Dogs of the Dow” strategy produces above-average income and concentrates on stocks that typically trade at lower valuations relative to the rest of the DJIA.

Given that the DJIA represents some of the largest companies in the world, its “dogs” are typically companies with strong track records that have hit temporary problems.

This is a great and simple strategy for value investors looking to purchase good businesses that are currently out of favor.

To implement this strategy, take the amount of money you have to invest and then divide it equally among the 10 highest-yielding stocks in the DJIA.

Hold these stocks for a whole year and then at the end of 12 months, look at the 30 Dow stocks again and resort them by dividend yield from highest to lowest.

Rebalance and reallocate your capital accordingly and repeat the process. In addition to the simplicity and focus on quality, value, and income that this strategy generates, it also improves discipline by preventing excessive emotion-driven trading.

It also encourages investors to reap the tax benefits from holding positions for at least one year before selling, thereby being taxed at the long-term capital gains tax rate instead of the short-term rate.

The 2025 Dogs of the Dow

The list of the 2024 Dogs of the Dow is below, along with the current dividend yield of the top-ten yielding DJIA stocks. Click on a company’s name to jump directly to analysis on that company.

Dog of the Dow #10: Procter & Gamble (PG)

Procter & Gamble is a consumer products giant that sells its products in over 180 countries. Notable brands include Pampers, Luvs, Tide, Gain, Bounty, Charmin, Puffs, Gillette, Head & Shoulders, Old Spice, Dawn, Febreze, Swiffer, Crest, Oral-B, Scope, Olay and many more.

Procter & Gamble has paid a dividend for 134 years and has grown its dividend for 68 consecutive years – one of the longest active streaks of any company.

In late January, Procter & Gamble reported (1/22/25) financial results for the second quarter of fiscal 2025 (its fiscal year ends June 30th).

Source: Investor Presentation

Sales and its organic sales grew 2% and 3%, respectively, over last year’s second quarter, primarily thanks to 2% volume growth. Core earnings-per-share grew 2%, from $1.84 to $1.88, beating the analysts’ consensus by $0.02.

Procter & Gamble reaffirmed its guidance for 3%-5% growth of organic sales and 5%-7% growth of earnings-per-share in fiscal 2025.

Click here to download our most recent Sure Analysis report on PG (preview of page 1 of 3 shown below):

Dog of the Dow #9: Home Depot (HD)

Home Depot was founded in 1978 and since that time has grown into a juggernaut home improvement retailer with over 2,300 stores in the US, Canada and Mexico that generate around $153 billion in annual revenue.

Home Depot reported third quarter 2024 results on November 12th, 2024. The company reported sales of $40.2 billion, up 6.6% year-over-year.

However, comparable sales in the quarter decreased 1.3%. Net earnings equaled $3.6 billion, or $3.67 per share, compared to $3.8 billion, or $3.81 per share in Q3 2023. Adjusted EPS was $3.78.

The company spent $649 million on common stock repurchases year-to-date, compared to $6.5 billion in the prior year. Average ticket declined 0.8% compared to last year, from $89.36 to $88.65.

Additionally, sales per retail square foot decreased 2.1% from $595.71 to $582.97.

Click here to download our most recent Sure Analysis report on HD (preview of page 1 of 3 shown below):

Dog of the Dow #8: International Business Machines (IBM)

IBM is a global information technology company that provides integrated enterprise solutions for software, hardware, and services.

Its focus is running mission-critical systems for large, multi-national customers and governments. IBM typically provides end-to-end solutions.

The company now has four business segments: Software, Consulting, Infrastructure, and Financing.

IBM reported results for Q4 2024 on January 29th, 2025. Company-wide revenue rose 2% in constant currency while diluted adjusted earnings per share climbed 1% year-over-year.

Software revenue increased 11% year-over-year due to 12% growth in Hybrid Platform & Solutions and an 11% increase in Transaction Processing. Revenue was up 17% for RedHat, 16% for Automation, 5% for Data & AI, and 5% for Security.

Click here to download our most recent Sure Analysis report on International Business Machines (IBM) (preview of page 1 of 3 shown below):

Dog of the Dow #7: Cisco Systems (CSCO)

Cisco Systems is the global leader in high performance computer networking systems. The company’s routers and switches allow networks around the world to connect to each other through the internet. Cisco also offers data center, cloud, and security products.

On February 12th, 2025, Cisco announced a 2.5% dividend increase in the quarterly payment to $0.41. That same day, Cisco announced results for the second quarter of fiscal year 2025 for the period ending January 25th, 2025.

For the quarter, revenue grew 9.4% to $13.99 billion, which beat estimates by $120 million. Adjusted earnings-per-share of $0.94 compared favorably to adjusted earnings-per-share of $0.87 in the prior year and was $0.03 ahead of expectations.

Excluding the company’s recent acquisition of Splunk, total revenue grew 11% for the quarter. Networking fell 3% while Security grew 117%, Observability was up 47%, and Collaboration improved 1%. By region, the Americas increased 9%, Europe/Middle East/Africa was higher by 11%, and Asia-Pacific/Japan/China was up 8%.

Click here to download our most recent Sure Analysis report on Cisco Systems (CSCO) (preview of page 1 of 3 shown below):

Dog of the Dow #6: Coca-Cola (KO)

Coca-Cola is the world’s largest beverage company, as it owns or licenses more than 500 unique non–alcoholic brands. Since the company’s founding in 1886, it has spread to more than 200 countries worldwide.

Coca-Cola now has 30 billion-dollar brands in its portfolio, which each generate at least $1 billion in annual sales.

Source: Investor Presentation

Coca-Cola posted fourth quarter and full-year earnings on February 11th, 2025, and results were much better than expected on both the top and bottom lines. Adjusted earnings-per-share came to 55 cents, which was three cents ahead of estimates.

Revenue was up 6.5% year-over-year to $11.5 billion, which was a staggering $800 million ahead of estimates. Organic revenue soared 14% year-over-year for the fourth quarter. Currency-neutral operating income was up 22% year-over-year.

For the year, global unit case volume was up 1%, and was up 2% for the quarter. Excluding IRS tax litigation, free cash flow for the year would have been $10.8 billion, up 1% from 2023.

Click here to download our most recent Sure Analysis report on KO (preview of page 1 of 3 shown below):

Dog of the Dow #5: Johnson & Johnson (JNJ)

Johnson & Johnson is a diversified health care company and a leader in the area of innovative medicines and medical devices Johnson & Johnson was founded in 1886 and employs nearly 132,000 people around the world.

On January 22nd, 2025, Johnson & Johnson announced fourth quarter and full year results for the period ending December 31st, 2024.

Source: Investor Presentation

For the quarter, revenue grew 5.1% to $22.5 billion, which beat estimates by $50 million. Adjusted earnings-per-share of $2.04 compared to $2.29 in the prior year, but this was $0.02 above expectations.

For the year, revenue grew 4.3% to $88.8 billion while adjusted earnings-per-share of $9.98 was up slightly from the prior year. Results included adjustments related to the costs of acquisitions.

Click here to download our most recent Sure Analysis report on JNJ (preview of page 1 of 3 shown below):

Dog of the Dow #4: Amgen Inc. (AMGN)

Amgen is the largest independent biotech company in the world. Amgen discovers, develops, manufactures, and sells medicines that treat serious illnesses.

The company focuses on six therapeutic areas: cardiovascular disease, oncology, bone health, neuroscience, nephrology, and inflammation.

Source: Investor Presentation

On February 4th, 2025, Amgen announced fourth quarter and full year earnings results. Revenue grew 11% to $9.1 billion, which was $230 million more than expected. Adjusted earnings-per-share of $5.31 compared favorably to $4.71 in the prior year and was $0.23 ahead of estimates.

For the year, revenue grew 19% to $33.4 billion while adjusted earnings-per-share of $19.84 compared to $18.65 in 2023.

Amgen had a successful 2024 as 21 products achieved record sales. For the quarter, growth was primarily due to a 14% increase in volumes. Excluding the addition of Horizon Therapeutics, product sales improved 10% and volume was up 15%.

Click here to download our most recent Sure Analysis report on Amgen Inc. (AMGN) (preview of page 1 of 3 shown below):

Dog of the Dow #3: Merck & Company (MRK)

Merck & Company is one of the largest healthcare companies in the world. Merck manufactures prescription medicines, vaccines, biologic therapies, and animal health products.

Merck employs 68,000 people around the world and generates annual revenues of more than $63 billion.

Source: Investor Presentation

On February 4th, 2025, Merck announced fourth quarter and full year results for the period ending December 31st, 2024.

For the quarter, revenue improved 7% to $15.6 billion, which was $110 million above estimates. Adjusted earnings-per-share was $1.72 compared to $0.03 the prior year and $0.04 more than expected.

For the year, revenue increased 7% to $64.2 billion while adjusted earnings-per-share of $7.65.

Keytruda, which treats cancers such as melanoma that cannot be removed by surgery and non-small cell lung cancer, continues to be the key driver of growth for the company as sales for the drug were up 19% to $7.8 billion during the period.

Click here to download our most recent Sure Analysis report on MRK (preview of page 1 of 3 shown below):

Dog of the Dow #2: Chevron Corporation (CVX)

Chevron is one of the largest oil majors in the world. The company sees the bulk of its earnings from its upstream segment and has a higher crude oil and natural gas production ratio than most of its peers.

Chevron has increased its dividend for 38 consecutive years, placing it on the Dividend Aristocrats list.

In 2023, Chevron agreed to Acquire Hess (HES) for $53 billion in an all-stock deal. If the deal closes, Chevron will purchase the highly profitable Stabroek block in Guyana and Bakken assets and thus it will greatly enhance its output and free cash flow.

In late January, Chevron reported (1/31/25) results for the fourth quarter of 2024. Production dipped -1% over the prior year’s fourth quarter due to downtime in some fields, despite record Permian output after the acquisition of PDC Energy.

In addition, the price of oil decreased and refining margins plunged to normal levels after two years of blowout levels. As a result, earnings-per-share fell -40%, from $3.45 to $2.06, missing the analysts’ consensus by $0.05.

Click here to download our most recent Sure Analysis report on Chevron Corporation (CVX)  (preview of page 1 of 3 shown below):

Dog of the Dow #1: Verizon Communications (VZ)

Verizon Communications was created by a merger between Bell Atlantic Corp and GTE Corp in June 2000. Verizon is one of the largest wireless carriers in the country.

Wireless contributes three-quarters of all revenues, and broadband and cable services account for about a quarter of sales. The company’s network covers ~300 million people and 98% of the U.S.

On January 24th, 2025, Verizon announced fourth quarter and full year results. For the quarter, revenue grew 1.7% to $35.7 billion, which beat estimates by $360 million.

Source: Investor Presentation

Adjusted earnings-per-share of $1.10 compared favorably to $1.08 in the prior year and was in-line with expectations. For the year, grew 0.6% to $134.8 billion while adjusted earnings-per-share $4.59 compared to $4.71 in 2023.

For the quarter, Verizon had postpaid phone net additions of 568K, which was better than the 449K net additions the company had in the same period last year. Retail postpaid net additions totaled 426K.

Wireless retail postpaid phone churn rate remains low at 0.89%. Wireless revenue grew 3.1% to $20.0 billion while the Consumer segment increased 2.2% to $27.6 billion.

Click here to download our most recent Sure Analysis report on VZ (preview of page 1 of 3 shown below):

Final Thoughts

Given the descriptions above, the Dogs of the Dow are clearly a very diverse group of blue-chip stocks that each enjoy significant competitive advantages and lengthy histories of paying rising dividends.

As a result, this investing strategy is a great, low-risk way for unsophisticated investors to approach dividend growth investing.

While it may not outperform the broader market every year, it is virtually guaranteed to provide investors with a combination of attractive current yield with steadily rising income over time.

If you are interested in finding high-quality dividend growth stocks and/or other high-yield securities and income securities, the following Sure Dividend resources will be useful:

High-Yield Individual Security Research

Other Sure Dividend Resources