The last time emerging markets were doing this badly the term “emerging markets” hadn’t been coined yet.
That spells opportunity, and the greatest spoils might go to those investors who are the boldest and also willing to look past that poorly-defined category. The benchmark for how emerging markets stocks are doing is a widely followed index maintained by MSCI that has returned less than 4% annually in the past five years, compared with nearly 12% for global equities and more than 15% for U.S. stocks.
Dig into any of those broad categories, though, and there are clear leaders and laggards. A whopping 65% of the MSCI All Country World Index’s market value, including nine of its top 10 stocks, were American as of the end of October. The MSCI Emerging Markets Index has been dragged down in large part since 2020 by China, where a housing crisis and a heavy-handed approach to technology firms by leader Xi Jinping have depressed valuations. Alibaba Group and Tencent Holdings were two of the world’s most valuable companies four years ago, before the tech crackdown.
If not for the massive surge of the MSCI index’s Chinese components in September on renewed stimulus hopes, the overall picture for emerging-markets stocks would be even worse. India, in no small part because it isn’t China, has seen huge foreign and domestic investor interest and now has the third largest weighting in the emerging-markets index. But it also is one of the world’s pricier markets .
Emerging markets outperformed developed market stocks in the century’s first decade as commodity prices boomed and the tech and housing bubbles dented the U.S. market. Today, though, they are much cheaper as a multiple of earnings, and not solely because of China.
Just buying an emerging-markets index fund and betting on the performance pendulum swinging back could be a decent strategy. Bolder investors might be able to do better: The most enticing opportunities are where skepticism is highest.
For example, Mexico and the multinational companies that use it as a base to sell products destined for the U.S. are in President-elect Donald Trump ’s crosshairs. Newly-elected leftist President Claudia Sheinbaum also faces violent drug cartels and protests over changes to the country’s judiciary. But the MSCI Mexico Index has gone absolutely nowhere, with a slightly negative return over the past decade and a forward price-to-earnings ratio of around 10 times—less than half that of the U.S. market.
And Mexico is pricey compared with South Africa, Brazil and Turkey, which fetch multiples on the same measure of about 9.8 times, eight times and five times, respectively. All three also face significant domestic problems and leaders who have mismanaged their economies. But even poorly-run countries can have long-term promise, and occasionally some short-term charms: Brazil’s dividend yield, for example, is about 6%, or five times that of the S&P 500 index.
Another way to profit as a savvy emerging-markets investor? By reading what is on the label and then ignoring it. MSCI’s benchmark has had an odd definition of what qualifies that mostly matters to professional money managers.
For example, both South Korea and Taiwan are major emerging markets, but their citizens are wealthier than those of developed Portugal or Greece. With leading high-tech companies like Taiwan Semiconductor Manufacturing Co . and Samsung Electronics , educated workforces and excellent infrastructure, they have more in common with neighbouring Japan, a developed market. MSCI cites market access issues that hold them back. That might still make them attractive places to invest, but the rapid growth a country enjoys by becoming modern, educated and wealthy—the sort of thing that has people so excited about India’s long-term potential—are now behind them.
Getting booted from the index can create anomalies too. Israel, which is richer than Britain or France , was included in the emerging-markets index until 2010 for what seems like geographical reasons. Then it went from being a notable emerging-markets investing destination to irrelevancy for many fund managers.
Because it is the only officially “developed” market in the Middle East, Israel is now part of the little-tracked MSCI Europe and Middle East Index created that year instead of the more-followed MSCI Europe, which dates to 1986. It is also a minuscule part of MSCI EAFE, which tracks 21 non-U.S. developed markets. With world class healthcare and tech companies like Teva Pharmaceutical Industries and Check Point Software in the index, “Startup Nation’s” stocks trade at barely half of the forward price-to-earnings ratio of the tech-heavy U.S. market.
And there are other stock markets just waiting to join, or rejoin, the official emerging-markets club. By the time they do the best gains might have been had. Take Argentina , which was demoted to “stand-alone” status three years ago because it was difficult to invest there. It has had a blistering return in dollars of almost 50% a year in the three years through October compared with a negative return for the MSCI Emerging Markets Index over that time.
While far from a foolproof investing strategy, betting that the last shall be first and buying what feels uncomfortable could pay off when it comes to beaten-down emerging-markets stocks.
Artificial intelligence is poised to transform both work and everyday life. But it has a dark underside: AI computer centres consume enormous amounts of electricity and water, to power their processing chips and cool the heat they emit.
Annual U.S. electricity use by data centres of all types will rise from 3% to 4% of the nation’s total today to between 11% and 12% in 2030, with AI being the main driver, according to projections from consulting firm McKinsey.
Meantime, AI’s demand for water globally in 2027 could account for more than the total annual amount withdrawn for use in Denmark or half of that in the U.K., according to researchers at the University of California, Riverside and University of Texas at Arlington.
All of that heavy use is causing logistical and public-image problems for the industry. Some utilities struggle to supply the needs of AI providers, and communities push back, fearing the added use will boost power prices and deplete water supplies.
The biggest AI providers, including Amazon , Alphabet Inc.’s Google, Meta and Microsoft , say they are working to be both carbon-neutral and replenish more water than they use—even as they continue to build massive data centres.
“It will be harder to build data centres, especially where energy already is at a premium or water might be scarce,” says Ed Anderson, research vice president at technology advisory firm Gartner. But, he adds, “the economic opportunity is rich enough that the providers will find a way.”
Below are some of the steps tech companies and researchers are hoping will reduce AI’s appetite for power and water.
Making chips more efficient
One way of addressing power consumption is to make chips less power hungry. Nvidia , the largest maker of AI processors, says its newest ones, called Blackwell, will be about 25 times as energy efficient as its previous high-end version. Meanwhile, Amazon, Google, Meta and Microsoft are designing their own processing chips, in part to cut costs but also to make them use less power.
“Each generation has been significantly more efficient than the prior one,” says Google’s Partha Ranganathan , a vice president and engineering fellow, speaking of his company’s processing units.
Different sources for water
Equipment used to cool data centres creates another issue: where to get the vast amount of water these systems consume. Google says its data centers globally used about 6.1 billion gallons of water in 2023, equivalent to the water used to irrigate and maintain 40 golf courses in the Southwest each year.
OpenAI’s GPT-3 model, meantime, consumes the equivalent of a 16.9-ounce bottle of water for every 10 to 50 responses it provides to users’ queries, according to the researchers at UC Riverside and UT Arlington. OpenAI declined to comment on the finding.
Data-centre water typically comes from municipal water systems. But in an era of water shortages, diverting drinking water for an industrial use has created tensions in some locales. That has sent AI companies searching for other sources, including rainwater, treated wastewater or water left over from factory processes.
Amazon, for example, uses recycled wastewater for cooling at its Santa Clara, Calif., data centers. The water comes from the city’s sewage-treatment system after it undergoes a three-step process that removes 99% of impurities.
Smarter training for AI
Some researchers have experimented with carefully controlling what kind and how much information an AI model takes in during training. Usually, training a so-called large language model AI, such as OpenAI’s ChatGPT and Microsoft’s Copilot, involves ingesting hundreds of billions of words from the internet and elsewhere, then learning the relationships among them.
And that is energy and water intensive. Training an AI model called BLOOM over a 3½-month period consumed enough electricity to power the average U.S. home for 41 years, according to a Stanford University report.
As for water, training one of Google’s AI models, known as LaMDA, used about two million liters of it, both to produce the electricity used and keep the computers cool—enough to fill about 5,000 bathtubs, according to Shaolei Ren , a professor of electrical and computer engineering at the University of California, Riverside. Google declined to comment on the research, but said it is “committed to climate-conscious cooling of our data centres.”
One possible solution is to have AIs remove redundancy and low-quality data, instead of just vacuuming up the whole internet. The goal is a much smaller set of data that the AI system can more easily sift through when a user asks it a question.
This can lower electricity consumption, according to some researchers.
AI systems that limit the information they take in are also less likely to “hallucinate”—give false or misleading answers—and can respond in ways that are more on-point because of the higher quality of the data they contain, experts say. Microsoft found that one of its pared-down AIs exceeded that of vastly larger ones in measurements of common sense and logical reasoning .
Dialling down the juice
Researchers at several universities have found that capping the amount of electricity used by AI computers has only a minor effect on the outcome, such as slightly more processing time.
Experts at the Massachusetts Institute of Technology and Northeastern University say that reducing the power to one of Meta’s AIs by 22% to 24% slowed the speed at which the AI responded to a query by only 5% to 8%. “These techniques can lead to significant reduction in energy consumption,” the researchers say. They add that the method also caused the processors to run at a lower temperature—which could trim the need for cooling.
Meta declined to comment on the research, but said it has had efforts to boost data-centre energy efficiency “since we started designing our first data center over a decade ago.”
Meantime, a team at the University of Michigan, University of Washington and University of California, San Diego devised an algorithm to modulate the use of power during training. The technique could cut power use by up to 30% , they say.
Show users AI’s impact
Some researchers believe companies should give users more context about the environmental impact of AI, to let them make more-informed decisions about the technology. Ren, of UC Riverside, proposes that AI providers disclose the approximate amount of electricity and water each query consumes—akin to how Google tells people searching for flights the amount of carbon emissions each trip would create.
Another proposal is to devise a rating system for the power efficiency of AI systems, akin to the government’s Energy Star ratings for home appliances and other products. Such a system could help people choose AI models for differing tasks based on their energy consumption, according to Sasha Luccioni , an AI researcher at Hugging Face, a company that makes machine-learning tools.
Using greener power
Academics and others have come up with other proposals to minimise AI’s environmental impact by tapping into green energy. For instance, companies might build more data centers in countries with abundant, low-emission power, such as hydropower in Norway or geothermal in Iceland. Or companies might do AI calculations at different locations at different times of the day, such as deploying computer centers with high use of solar power during the daytime or wind-powered ones when wind is more reliable at night.
Chilling the computers
Data-centre computers put out tremendous amounts of heat, and their temperature must be kept in a certain range, often 64 to 72 degrees, to prevent damaging the electronics. Traditionally, this has been done by high-power air conditioning. But air conditioning uses up to 40% of all the electricity consumed by a typical data centre, while devices called cooling towers that expel the heat to the outside air use a lot of water.
In response, the data-centre industry is moving to liquid cooling, which circulates a special liquid or cold water to “cold plates” that sit on top of the processor chips and keep them at a safe and efficient temperature range. The system, called direct-to-chip liquid cooling, uses less power than the traditional method—about 30% less, Nvidia says—because liquid is vastly better at removing heat from the electronics than blowing cold air over them.
Another method under development, called immersion cooling, involves placing the computers themselves inside big tanks of cooling liquid. While showing early promise, there are environmental concerns about the chemicals often used in the setup, says Mark Russinovich , chief technology officer of Microsoft’s Azure cloud-computing unit.
Some companies, meanwhile, are using computing gear that can withstand higher temperatures and doesn’t need as much cooling. Google says its data centres already are 1.8 times as energy efficient as the typical data centre, which it achieved in part by raising the inside temperature to 80 degrees. For every one-degree boost in their temperature, data centres can save 4% to 5% in energy costs, according to the Energy Star program.
“Are those fireworks or something?” asked a passenger on Emirates flight EK146 from Amsterdam to Dubai last month, in a video posted to social media. In fact, what she was watching through her cabin window was a barrage of Iranian missiles headed to Israel.
Her flight was one of scores that shared the skies with Iranian missiles on Oct. 1, an example of how the escalating conflict in the Middle East is endangering commercial aircraft in some of the world’s busiest skies.
The number of missiles crisscrossing the region has surged since the start of Israel’s war with Hamas: An average of 162 missiles have been fired each month so far this year, up from 10 a month in 2023, according to aviation security firm Osprey Flight Solutions. This has led to warnings from airlines, crews, security experts and families of air crash victims that an airliner could inadvertently be shot out of the sky.
Missiles have been spotted in-flight by pilots and passengers, struck near airports, and been fired by militaries and militias without warning to airlines. Governments and aviation regulators have meanwhile failed or been slow to close or restrict airspace.
There is precedent for the concern. Two commercial aircraft have been shot down in recent conflicts. Malaysia Airlines flight MH17 was downed over eastern Ukraine by Russian-backed militants in 2014, and Ukrainian Airlines flight PS752 was mistaken for an incoming missile by Iranian forces shortly after takeoff from Tehran in 2020.
For passengers flying on Oct. 1, the threat felt real. Madalina Birca, 24, was flying with Emirates from Nice, France, to Dubai when the captain announced, with a slight tremble in her voice, that “due to the war situation” the flight was being diverted.
Passengers quickly switched their screens to news channels to find that Iran had started its attack on Israel. Birca followed on the live flight map as the aircraft made an abrupt turn just before crossing into Iranian airspace. She used the in-flight Wi-Fi to try to calculate the missiles’ trajectories and how close her flight had come to catastrophe.
“We were very lucky that we didn’t cross already into the airspace,” Birca said.
Birca’s was one of more than 80 flights that were diverted on Oct. 1 because of the attack. Many other flights continued uninterrupted over Iraq, Jordan, Syria and northern Saudi Arabia, with dozens passing close to launch sites in the north and south of Iran.
Radio messages from air-traffic control towers in Iraq, Kuwait and Bahrain captured some of the tumult in the skies, with pilots declaring emergencies and diversions, and in some cases exclaiming that they could see the projectiles themselves.
“Missiles over Baghdad, over Najaf, over everywhere,” one pilot radioed to Baghdad air traffic controllers, according to a feed from live radio specialist, Broadcastify.
“We noticed some missiles,” a Kuwait Airways pilot said.
“Lights, rockets, I don’t know, now they’re not visible anymore,” someone radioed to pilots on Air France flight 662 to Dubai. Air France has opened a probe into why the flight was caught in the affected airspace.
While ballistic missiles reach an apex far above the altitude of a commercial jet, they pose a major risk during their ascent and descent. About 10% of Iran’s ballistics are also estimated to fail midflight, which, along with their ejected boosters, leads to falling debris. Cruise missiles typically fly at lower altitudes, endangering aircraft as they take off and land. At times, the biggest risk is posed by air-defence systems misidentifying a commercial aircraft as incoming fire.
The tally of projectiles, tracked by Osprey, accounts only for ballistic and cruise missiles. Its figures don’t include unguided rockets, mortars, artillery fire and drone attacks, each of which can also endanger flights.
The risk is ongoing. Iran has briefed regional officials that it’s preparing a response to Israel’s latest retaliatory strike that will utilise more powerful warheads. Osprey has warned airline customers that the next attack could be coordinated with Iranian-backed militias in Iraq, Syria, Yemen and Lebanon, widening the areas of airspace at risk.
Meanwhile, strikes exchanged between Israel and Hezbollah have regularly targeted or struck areas near airports, including a missile that landed in a parking lot at Tel Aviv Airport this month and an Israeli airstrike that caused an explosion near Beirut Airport’s runways a day later.
Israel’s strike against Iranian sites on Oct. 26 was also launched without official notice to airlines, though the early morning timing—around 2:15 am in Iran—meant fewer aircraft were operating. The Israeli Air Force typically consults air-traffic controllers before any strike to try to minimise risk, according to an official.
“It’s a huge concern to civil aviation. We know what happened with the Ukrainian airliner that was shot down in Iran mistakenly,” said Hassan Shahidi , president of the Flight Safety Foundation, a global, nonprofit advocacy group, calling the incident “absolutely preventable.”
Despite the surge in military activity, Middle Eastern airspace has largely remained open over the past year. The region’s already busy skies have become more important after Russia’s invasion of Ukraine locked out carriers from swaths of airspace over both countries.
Aviation safety experts have criticised the inconsistent way in which the skies have been managed by governments, including issuing late or no airspace closures.
“National security and foreign policy trump aviation security, and it happens over and over again in conflict zones,” Osprey’s Chief Intelligence Officer Matt Borie said in an interview.
The U.S. Federal Aviation Administration and others have long imposed bans and restrictions on flights over North Korea because of the country’s tendency to conduct a handful of unannounced ballistic missile tests each year. Last year North Korea launched 37 missiles; this year so far, 52.
Days after Iran’s Oct. 1 launch, the FAA extended its ban on U.S. carriers crossing into Iranian airspace by three years until October 2027, a prohibition it first put in place after the downing of Ukrainian Airlines flight PS752 in 2020. A separate restriction that prevents flights over Syria is also in effect until 2028.
U.S. carriers aren’t restricted from flying over Iraq as long as the aircraft is traveling at a minimum altitude of 32,000 feet, according to the FAA’s latest advisory. There are no explicit warnings against operations over Jordan, Lebanon or Israel, though the agency maintains a 2021 notice that airlines “exercise caution” in those areas because of the proximity to the military situation in Syria.
A push at the United Nations to standardise rules for commercial flights over conflict zones that began after the downing of MH17 in 2014 has largely stalled, security experts say.
The U.N.’s International Civil Aviation Organization disputed that characterisation, citing an updated manual due this year, a meeting of its “Safer Skies” committee next year and the possible hosting of a third workshop on the subject. The measures demonstrate “the international community’s ongoing dedication to preventing future tragedies in conflict zones,” a spokesman said.
Outside of official bans, airlines typically make their own decisions about whether to fly over a conflict zone on any given day. They rely on a patchwork of advisories from regulators, intelligence from government agencies and advice from private security companies. Rerouting a flight can be a major operational challenge that adds additional fuel costs, can require additional staffing, and which disrupts preassigned takeoff and landing slots.
Even before Oct. 1, most Western carriers, including U.S. airlines, had withdrawn flights to Israel, Iran and Jordan. Many have also opted to reroute flights crossing that corridor to now fly via Egypt and Saudi Arabia.
Carriers are also taking other measures. Emirates is carrying additional fuel in case a flight is required to make an emergency diversion, while European discounter Wizz Air says it will only fly in certain airspace during daytime hours when the risk of an attack is lower. Israel’s flag carrier El Al, meanwhile, has long equipped its aircraft with antimissile defence systems.
Airlines say that safety is their top priority and that any flight path is carefully considered before being allowed to depart. But they’ve also criticized governments, including after Iran’s Oct. 1 attack, for not taking adequate care to protect commercial aviation.
“It’s quite volatile,” Emirates Chief Commercial Officer Adnan Kazim said in a recent interview, adding that his airline has regularly been holding multiple security meetings a day, in addition to its daily security briefing. “Some of these kinds of situations, unfortunately they don’t come with any alert, or any pre-information and you need to manage the situation as you go.”
Israel has rerouted standard flight paths in and out of the Tel Aviv airport away from danger zones since the start of the conflict, according to Libby Bahat, head of aerial infrastructure at the Civil Aviation Authority of Israel. When it learns of potential incoming attacks, it reduces the number of flights in the airspace to make it easier for air-traffic controllers to quickly scatter aircraft to safety, Bahat said.
A spokeswoman for the Israeli Defense Force declined to comment. Aviation regulators in Iran, Iraq, Jordan and Lebanon didn’t respond to requests for comment.
Pilots have expressed concerns. The European Cockpit Association has complained that some airlines are forcing pilots to fly routes even if they disagree with their airline’s safety assessment. The union also wants airlines to update life insurance policies, which typically don’t pay out in the case of a downing over a conflict zone.
“At any moment another disaster could happen that can take the life of innocent people again,” said Kourosh Doustshenas, whose partner died along with 175 others when Iran inadvertently shot down Ukrainian Airlines flight PS752. “We have gone through this, and this can happen any time.”
The U.S. had cautioned that morning of an increased risk of misidentification in Iranian airspace, but with most of its security team off work for Orthodox Christmas, Ukrainian Airlines failed to heed the warning.
Doustshenas has called for governments to be held legally accountable for failing to protect civilian airliners from becoming collateral damage. He also wants passengers to be informed if their flight is routed to fly over a conflict zone.
“Regular people going to the airport to catch their flight have no idea,” Doustshenas said.
By 9 p.m. on election night, it had become clear to Jason Junod that Donald Trump was returning to the White House. That night, he contacted his skin-care company’s suppliers in China to order a year’s worth of inventory for about $50,000—as much as he could afford to buy and had room to store.
His hope is that the roughly 30,000 body brushes and exfoliating gloves make it to Bare Botanics’ facility in Madison, Wis., before Inauguration Day. He thinks Trump is serious about his campaign promise to impose tariffs of 60% on all Chinese goods.
American businesses are dusting off a playbook they used during Trump’s first term: stocking up on imported goods before tariffs are enacted. They are also considering how to cope with the levies if and when enacted—whether they will be able to raise prices and whether they will need to find alternatives to their Chinese manufacturers.
“The biggest consideration is, do we stay in China?” Junod said.
When Trump began his trade war against China in 2018, U.S. businesses scrambled to front-load imports before tariffs were implemented, according to an International Monetary Fund analysis. As a result, the U.S.’s trade deficit with China—how much imports exceed exports—rose in 2018 before falling in 2019.
Bare Botanics’ body brushes are manufactured in China. Photo: Jamie Kelter Davis for WSJ
Already, exports from China surged last month, which some economists think could have been driven at least in part by front-loading amid uncertainty around election results. Outbound shipments from China rose nearly 13% in October from a year earlier, well above consensus expectations and up sharply from 2.4% growth in September.
Chinese exports growth should remain strong through the next few months because of front-loading, Wall Street economists said.
China remains the world’s top exporter of goods and the U.S. its top buyer. American companies bought roughly $430 billion of Chinese goods last year, with computer and electronic products making up the biggest chunk.
Wan Junhui, who works in marketing for an electronics manufacturer in Guangdong province, said his company has observed an increase in inquiries and “noticeable unease” from its U.S. clients recently. He said that tariffs so far haven’t affected sales significantly, but that buyers end up absorbing the levies and sometimes raising prices for their end customers.
“We’ll do our best to focus on reducing costs to help ease the situation and make it through this harsh winter,” he said.
Though China’s share of U.S. imports has declined to roughly 14% in 2023, from 22% in 2017, rising tariffs between the U.S. and China have done little to curb the overall U.S. trade deficit in global trade or China’s overall trade surplus.
The persistent trade imbalance is driven by strong demand from American consumers and weakening domestic demand in China, according to the IMF. U.S. firms have boosted their share of imports from places such as Vietnam, while China has increased exports to regions including Southeast Asia.
Tariffs aren’t paid by exporters, but rather by businesses that import products. Economists say those businesses usually pass on the bulk of the cost to consumers by raising prices.
Some economists doubt the U.S. will succeed in raising tariffs to 60% across the board on Chinese products. Economists at Goldman Sachs predict additional duties on China could average out to a 20 percentage-point increase in the effective tariff rate.
In addition to duties on Chinese goods, Trump proposed tariffs of 10% to 20% on imports from all countries.
That would be the worst-case scenario for Leah Dark-Fleury, co-founder of Stone Fleury, a natural-stone and porcelain wholesaler in San Francisco. She has been buying natural stone from the same supplier in China for two decades and imports most of her other materials from Europe.
When Trump imposed a tariff on Chinese natural stone during his first term, Dark-Fleury continued buying from China as usual. The company raised prices to compensate, but tried to not charge the full increase to stay competitive.
This week, she asked her supplier in China about the possibility of ordering about two shipping containers’ worth of natural stone under a payment plan to try to get ahead of tariffs. That could cost up to around $100,000 and last her between a few months and a year, depending on customer demand. In the longer run, she expects to raise prices on materials from China and shift some sourcing to Vietnam.
“I wish that I could buy enough to get us through the four years,” she said.
Toni Norton , owner of Fine Fit Sisters in Charlotte, N.C., sources body oil from China that is popular with customers in the summertime. She normally wouldn’t be stocking up until the new year, but is trying to order about 20,000 units before the end of the year.
If tariffs on Chinese products indeed reach 60%, Norton said she might have to stop selling body oil and focus more on her fitness-coaching services. She said she doesn’t think she has much room to raise prices on the body oil, which she mostly advertises on TikTok and sells for about $13, because “people like cheap things.”
Front-loading imports “is a short-term solution,” said Chris Tang , a professor of supply-chain management at the University of California, Los Angeles. Businesses are likely to need additional strategies in a world with persistently higher and broader tariffs.
Companies have already been moving manufacturing from China to places such as Southeast Asia and Latin America, a trend that is expected to continue—if buyers are able to find a suitable alternative to Chinese production.
A 2024 survey by Bain & Company found that 69% of chief executives and chief operating officers plan to reduce their company’s dependence on China, up from 55% in 2022.
Ryan Bursky , CEO of Lucidity Lights, a maker of lighting products in Boston, said the expectation of new tariffs is only accelerating a process under way at his company. Lucidity Lights made a strategic decision last year to begin sourcing outside of China, where it had previously done all of its production, in part because of the first phase of the trade war.
The company is on track to do about 15% of production in Cambodia this year, with plans to move about half of production out of China next year. He believes it is a better use of resources to invest in supply-chain diversification, rather than stockpiling.
Bursky said it has taken some time to find the right suppliers in Cambodia, which is still growing its manufacturing capacity and speed. But he thinks that the products made in Cambodia are better quality and that there is more attention to detail.
Joe Jurken , the founder and managing director of the ABC Group in Milwaukee, which helps U.S. businesses manage supply chains in Asia, expects China to still dominate manufacturing somewhat, even as his clients have beefed up sourcing from countries such as Vietnam, India and Cambodia.
China has developed infrastructure, communication and transaction channels that make doing business easy for Western companies, while those systems are still being developed in other countries, he said. Plus, it is hard for manufacturers in other countries to beat Chinese suppliers’ low prices.
“China will never be replaced,” Jurken said. “Other markets are an alternative.”
Junod, who started his skin-care business in 2020, has considered looking for manufacturers in Southeast Asia, but believes it would be difficult to replicate the low cost and high quality he has come to rely on from his Chinese suppliers.
“It feels like we’re being punished because there isn’t really anywhere else for us to turn domestically,” he said of Trump’s proposed tariffs. “We have no choice, really, but to pay them.”
The first $100 million home sale in the U.S. happened in 2011, when Russian-born billionaire Yuri Milner purchased a lavish mansion in Silicon Valley in a nine-figure deal. Back then, Milner’s buy was an outlier and set an ambitious benchmark for the luxury market. Nowadays, as the ranks of ultra wealthy individuals swell globally, $100 million-plus transactions barely cause ripples in markets like New York, Miami, Los Angeles, Palm Beach, Fla., and Aspen, Colo. More than 40 transactions have closed nationally at or above that benchmark in the intervening years, according to appraiser Jonathan Miller .
Behind those deals are a small group of real-estate power brokers responsible for marketing and selling the homes to the billionaire class. We talked to four agents whose deals have crossed the nine-figure threshold about how the biggest transactions really unfold. The interviews have been edited for clarity.
For real-estate agents, landing a high-profile or billionaire client is a painstaking and competitive process, and often means pitching against rival agents. Each agent has their own secret for getting an advantage.
JILLHERTZBERG : “You’ve got to read the paper and watch the news. I remember when Shaquille O’Neal was coming to the Miami Heat, each person on my team probably called 100 people, asking ‘Do you know Shaq?’ One person would give us the name of another person and then another person. We were lunatics.
We finally got to him and he said, ‘No, I have an agent already.’ But we convinced him to give us a couple of hours, and that no one knew Miami like we did. The first house we took him to was the one he eventually bought, a beautiful estate on Star Island.
RYANSERHANT: For the buyers we know who are trophy-home hunters, we keep our eyes on the homes in Palm Beach, Miami, Texas, Colorado and California that could go at these price points. We keep tabs on whether the owners would be willing to sell.
HERTZBERG: We went on a really big listing appointment on La Gorce Island in Miami Beach once. They asked us to come Tuesday at 10 a.m. When we showed up, there was another top agent already sitting on the patio. Another one arrived soon after. They had lined us all up at half-hour intervals. There was a little smile there to each other, like maybe we should just all do it together.
For $100 million homes, the prospective buyer pool is relatively small. That often means dealing with the same people over and over.
RAYNI WILLIAMS: It’s a very elite group of people. A lot of times they are collectors of trophy homes. Even if they don’t want to buy the property, they often will call because they want to come see it. It’s just a vanity showing. For me, it’s kind of like being a docent in an art gallery. They are coming in to admire the art. They’ll say, ‘please tell me about this architecturally significant property,’ and ask me what I know about Tadao Ando, the Japanese architect whose work is really in vogue. You’re cultivating relationships. Wealthy people love to educate themselves on all the latest and greatest.
Pricing homes at the highest end of the market is more art than science. Frequently, luxury homes come on the market for big-ticket prices, but later sell for significantly less .
WILLIAMS: It starts with the seller and what their expectation is. It’s about replacement cost, location and then data. You have to take into account how much it’s going to take to get them out of there without losing money, and the brain damage that it would take for somebody to re-create the property. People at this level are willing to pay a premium when they find something they love, because maybe they are getting older and they only have 20 good summers left, or their grandchildren are getting older. What is the value of your life if you’re under construction and you’re taking daily and weekly construction and design meetings? It’s a headache and a lot of clients tell me it can be hard on their marriage.
HERTZBERG: We’re going to go to the highest number we can possibly get without tipping over, then see how the market responds. If you tip over, that’s when you have price reductions, or you lose the listing or people get unhappy. Sometimes, you advise the seller to price at $100 million and then he speaks to other agents and they say $200 million. The seller will say, ‘We’re going to go with them, because they believe in the property more.’
RILEYWARWICK: Some agents have a strategy I don’t particularly subscribe to, which is to take a listing at all costs or at any price, then use it to market themselves. They say, ‘Well, who knows, maybe someone will pay this. Or if I can get the fish in the boat, then I can lower the price until eventually someone buys it.’
SERHANT: Sometimes the best marketing plan is to have no price, and not go officially on the market at all. Oftentimes, especially with super luxury homes, people want what other people can’t have. We’ve had buyers pay a premium because they don’t want the seller to put the property on the market. They don’t want anyone else to have it, and they don’t want anyone talking about it ever.
In 2017, a Los Angeles spec house became the highest priced home in the country when it listed with Williams for $250 million. It was the creation of Bruce Makowsky, who made a fortune selling handbags on QVC. It sold in 2019 for $94 million, plus $10 million of furniture.
Bruce Makowsky at his Bel-Air spec home, named Billionaire. Photo: Jae C. Hong/Associated Press
WILLIAMS: I think his strategy was just to get it on everyone’s radar. It worked. We touched hands with every single extraordinarily wealthy person that came to L.A. at that time. They all wanted to see it. At one point, he had a $150 million offer from a local that really wanted it and Bruce didn’t take it. I think he wanted it to be the most expensive house in the world and he wanted the price to have a 2 in front of it. Years later, he ended up selling it for $104 million to one of the first people who ever saw it. (The purchase was tied to Saudi real-estate magnate Fawaz Al-Hokair. )
These houses either sell in three months, or they sell in three years. They are hard to sell quickly because it’s a discretionary purchase. It’s emotional. This isn’t a family that’s relocating from New York City and has to get here to get their kids into school in Bel-Air. This isn’t a family that needs a house. If you’re buying a $100 million-plus dollar house, you already have a really nice home somewhere.
Even the most expensive homes often need to be staged.
WARWICK: That means removing potentially offensive items. We’ve had animal mounts replaced with contemporary art and political flags or signs removed. People get very offended. I’ve had people walk into an ultra luxury home, see an animal mount and turn around and walk right out. More than once.
Many brokers approach finding a buyer for a mega-listing systematically, but sometimes it comes down to chance.
SERHANT: You’re mass marketing and you’re also target marketing. We draw up a list of names from the Forbes list, the Bloomberg Billionaires Index, all the global wealth lists. We look at which companies went public over the last 24 months, which companies are about to go public. Who recently had or is about to have a liquidity event? Have there been major marriages or engagements? Sometimes, I think I know exactly who the buyer is going to be for a New York apartment, and then it’s a fracking billionaire from Texas. I’m like, really?
I once went to Masa, the expensive sushi restaurant in New York, with my wife. The couple next to us recognises me. He recognised me from TV. She recognised me from TikTok. I saw that she had a really big rock on her finger, so I asked if they were engaged. I suggested they needed a new place. Two weeks later, I sold them a full-floor apartment at Central Park Tower for $50 million.
Serhant recently had the listing for a $250 million penthouse at New York’s Central Park Tower. The triplex spans from the 129th to the 131st floor. Photo: SERHANT. Studios
Listings for trophy homes inevitably draw millions of eyeballs. Agents must determine whether interested parties are qualified buyers before they let them in the door.
SERHANT: To see a $100 million house, you need to show the ability to close in cash or that your net worth is over $1 billion.
WILLIAMS: Nobody gets into my properties unless I can prove who they are. Ninety-nine percent of people can be googled, except Asian buyers. If they can’t be googled, then we require proof of funds, usually in the form of a letter from a bank or private wealth manager on professional letterhead. It’s usually not hard to verify if somebody is real or not. If you are a mega-buyer, you have a footprint. You’ve donated money, you’ve been photographed.
SERHANT: There are con artists everywhere, there are people that want to waste your time everywhere. Even billionaires. Sometimes they are just in New York or they are in Florida and they fancy seeing something nice. They have no intention to buy.
HERTZBERG: If they say they are under the radar, we don’t take them. Nowadays, no one’s under the radar who has money.
Dealing with the global elite often requires being flexible for showings.
SERHANT: I’ve done showings in the middle of the night and early in the morning when the streets are totally empty. I had a very prominent and recognizable guy in finance who asked to see a New York property at 4:30 a.m. I understood why he did it. He knew that no one would see us. I’ve also had people wear disguises. I had somebody pre-Covid, a celebrity, who wore a baseball hat with a long black wig underneath and sunglasses. Post-Covid, everyone just wears masks.
WILLIAMS: Sometimes, a really high-profile person will register the name under their CFO or under an alias of another prominent person that would still be approved for the showing. And then when they turn up, you know who they are, and you play along.
And it can require pulling out all the stops.
WILLIAMS: I once had a guy who had just had a ton of success and he told me during the first showing that he was soon headed to Miami with his friends to celebrate. He wanted to bring them to see the house before they headed to the airport. I tried to get into the psyche of this guy and what he was into. I did some research and I found out that he loved gaming, so in the movie theatre, I put an Xbox. He had told me that he loved Japanese food, so I had catered sushi with servers throughout the property. Then, I got these gorgeous Ralph Lauren leather satchel bags as carry-ons he could take on the plane and filled them with chocolate from all the best spots in L.A., as well as marketing materials for the home. He texted me from the plane to say how incredible the experience was. And he bought the house. For $70 million.”
WARWICK: You think that these incredibly successful people are so busy, but I actually find them to be interested in every little detail of the properties we show them. One of my clients wanted to walk the entire property line of a 40- or 50-acre property, which took about an hour. They wanted to understand the land they are buying. One client was very fixated on the picture frames in the house and they wanted the seller to leave them behind, over 100 of them. The seller had to take their own family photos out of every single frame. I had another client who came in with their own water-testing kit to test the drinkability of the water and make sure the PH level wasn’t too high. They wanted the water in the kitchen to have a higher mineral content for their espresso machine.
Sometimes agents field unusual requests from sellers and buyers
WARWICK: I’ve seen more than once where a buyer will allow the seller to stay in the property or rent the property back for sometimes up to a year, or return for a holiday. I’ve had a seller want just one more Christmas in the house with their family, and the buyer allowed them that. I’ve also had deals where people trade additional houses as part of the transaction. The buyer has a property in another state, so they’ll give the seller X dollars plus their house in another state.
SERHANT: We had one very well known mega-billionaire come through a $250 million penthouse listing in New York. That apartment has the highest private residential ballroom on the planet. We’re standing in that empty room and he beckons me over with his finger. He says, ‘If I put a ping pong table in this room, will it be the highest ping-pong table on earth?’ I was like, ‘I’ll have to check, but I think it’s definitely up there.’
The Central Park Tower penthouse had its price cut by $55 million in fall 2023, a year after being listed. It is no longer on the market. Photo: Evan Joseph
WILLIAMS : We had somebody that wanted to test out the house, and use it for a weekend. I wasn’t convinced but the seller wanted to do it. The person probably wanted to do their own thing, but I couldn’t help myself. I went full on to make their experience as pleasurable as possible. I had a masseuse and a private chef come to the house to cater to them. If they wanted freshly-baked chocolate chip cookies at 3.30 in the morning, they could have them.
The typical commission for an average real-estate sale is 6%, split between the buyer’s and seller’s agents. For nine-figure luxury homes, agents often settle for a lower fee.
WILLIAMS: Taking on these big listings is expensive, and you have to have a big book of business to afford it. You can spend $100,000 out of your own pocket to market these. The commission is usually a 2% fee, but they might ask if you would do it for a little less, like 1.75%. But generally speaking, the most successful people I’ve worked with are very happy to pay the full commission. They want you to do an amazing job.
WARWICK: We fly videographers in from all over the country to film our properties, we have architects design renderings of what could be built on these properties, we do all-day photoshoots from sunup to sundown.
Any out-of-pocket expenses aren’t reimbursed or paid back should an agent lose the listing before it sells.
WARWICK: It’s a huge financial commitment and sometimes you carry these properties for a year or two. It’s a risk and that’s why sometimes we don’t take listings. If the seller is unrealistic, it’s an investment not worth making.
It’s very common for buyers and sellers at the top end of the market to ask agents to sign nondisclosure agreements, preventing them from speaking about the parties involved in the deal. However, news of the transaction often leaks regardless.
SERHANT: It’s tough to keep the deals private because of everyone that touches the transaction. Your buyer is coming in contact with door staff, the seller, the other real-estate agents that might be involved and their teams, the driver. There are points of contact everywhere. I spend a lot of time making sure that everybody in the transaction is aware of the confidentiality.
HERTZBERG: I would love for people to know that I work with these types of people, but it’s more important to work with the people. It’s funny because I’m married to a litigator and he has so many confidential relationships that I don’t know about. If I have a big deal with an NDA, I can’t tell him the name either. We just don’t go there.
Negotiations often require creativity.
WILLIAMS: I was doing a deal close to $100 million and there was a $5 million delta between what the buyer was offering and the seller was willing to accept. It’s all relative; at that price point, $5 million is not a big difference. I normally wouldn’t do this, but I decided to get them together. I had them meet in a private room at the Beverly Hills Hotel. We ordered them some food, set them up and then left. By about four or five hours later— maybe some cocktails were involved— they bridged the gap and split the difference. Sometimes, you have to be smart enough to know to get out of the way. The two of them are still friends.
Dealing with the wealthiest clients comes with perks.
WILLIAMS: After I sold the Bruce Makowsky house, he called and said, ‘Meet me in your office in 20 minutes.’ He walks in with this huge, white box and plops it on my desk. Inside, there’s a coffee-table book all about his megayacht. “It’s yours,” he said. He gifted us 12 days on his yacht, which was docked in St. Barts. I took my whole family and best friends.
SYDNEY—The Reserve Bank of Australia remains jittery about the risks of higher inflation and will have little tolerance for any data that point to further delays in taming price pressures, according to the minutes of its latest policy meeting.
“Given the already lengthy period in which inflation had been above (2% to 3%) target, the board will have minimal tolerance to accommodate a more prolonged period of high inflation, even if this occurred because of factors that constrained the economy’s supply capacity,” minutes of the meeting held on Nov. 4-5 said.
The RBA left the official cash rate at 4.35% at the meeting, completing a full year since policy settings were last changed.
Economists remain confident that the RBA will start to cut interest rates in the first half of next year, but money markets are far less optimistic, with recent swap market pricing suggesting the RBA could be delayed until August.
To be sure, the minutes suggested the RBA is in no rush to cut the OCR, given numerous warnings about stubborn inflation pressures and a comment that the board will need to see more than one good quarterly inflation outcome to be confident that a fall in inflation was sustainable.
Inflation remained above the target band in the third quarter, with policymakers concerned that core inflation readings remain stubbornly high, while price pressures in the services sector of the economy remain sticky.
“Members observed that underlying inflation…remained too high and that staff forecasts did not see inflation returning to target until 2026,” the minutes said.
The RBA said it isn’t ruling anything in or out in terms of policy decisions, implying that under the right conditions, an interest rate increase might still be needed.
The minutes showed the policy-setting board explored several scenarios that might see it raise or lower the OCR.
The RBA was among the last of the major central banks to start raising interest rates following the global spike in inflation at the end of the Covid-19 pandemic, while also not tightening as far as its peers over ensuing years.
Global events might yet determine the outlook for interest rates. The minutes cited a number of growing international risks including uncertainty about the policy direction of the Trump White House, the size and composition of stimulus to support China’s economy, and the potential for unsustainable growth in global government debt.
“It was not yet possible to factor in events such as these, given pertinent details were unknown and still largely unpredictable,” the minutes said.
BAKU, Azerbaijan—With more than 23,000 companies representing some $6.4 trillion of purchasing power reporting their emissions through CDP, the not-for-profit charity formerly known as the Carbon Disclosure Project is one of the leading names within the corporate sustainability space.
The U.K.-based nonprofit, which has been operating since 2000, was set up to encourage companies to disclose their environmental impact, including their carbon footprint, water usage and effects on forests and nature.
But amid a recent backlash against environmental, social and corporate governance initiatives, and as clean-energy stocks have slumped this year, concerns are growing over how important climate and sustainability reporting has become to companies. Greenhushing, the idea of companies pursuing climate plans without announcing them, has become a common practice, mainly because they fear being called out for greenwashing.
But, according to CDP Chief Executive Sherry Madera, these doubts should be put aside. A growing requirement for mandatory reporting, improved data and companies’ willingness to engage with supply chains are all signs that corporate engagement with climate and sustainability is still top of mind.
WSJ Pro Sustainable Business spoke to Madera at COP29 in Baku to discuss corporate engagement with climate and the push for company disclosures. The conversation has been edited for clarity and length.
WSJ: How will the Trump victory affect company policy around disclosures?
Madera: Climate change doesn’t start and stop with elections—and neither does climate action. Leading companies aren’t waiting to be told what to do; they’re already disclosing climate data because they know transparency equals opportunity. With 86% of the S&P 500 now voluntarily disclosing, it’s clear: U.S. companies aspiring to be global leaders understand that climate action is no longer optional—it’s a necessity. Regardless of shifting political landscapes, the competitive advantage is undeniable: those who act now will secure access to capital, reduce risks and lead in efficiency. The future isn’t just about compliance; it’s about staying ahead in a global economy where sustainability defines success. Any administration that cares about the economy has to care about data, science and climate.
WSJ:How can you encourage the private sector to disclose more climate and supply-chain data?
Madera: CDP is 24 years old. So the idea of surfacing information for investors, customers, economists and government regulators to take action on climate is not new for us. But it’s really come into its own in the last few years when disclosures became mandatory in many places around the world or have been signposted to be mandatory in the next few years.
I think that there’s a real shift in thinking about just setting targets versus now implementation. If we find ways of making sure that the money flows to more sustainable investment options, I think that really underpins what we as economies are trying to do.
There’s a lot of talk about the pushback, but the data doesn’t show that for us. So year-on-year we’re growing at about 24% voluntary disclosures from companies worldwide and that includes countries that don’t have a mandatory disclosure plan in place, i.e. the U.S.
Businesses are willing [to disclose] not because they necessarily have the primary directive of saving the planet but they’re willing to share information and to disclose data because it’s a business necessity now.
WSJ:How do you see corporate disclosures evolving over the next few years?
Madera: I see more mandatory disclosure is coming into place around the world and I think that’s a great thing. CDP has been encouraging this for decades so that’s great with the qualifier that says actually harmonising what is being asked for from a mandatory perspective is advantageous.
The reality is if you look at principles, frameworks, standards and data, the data is quite consistent and it’s just about making sure you’re mapping it and tagging that data so it doesn’t need to be written multiple times. And that efficiency I think is going to be really important because essentially every dollar you spend on reporting is a dollar you can’t spend on action and that doesn’t seem right.
WSJ: Do you see the role of the chief sustainability officer evolving and becoming more aligned with the chief financial officer? Would that be a good thing?
Madera : I think it’s a good thing. The CFO needs to be convinced that there is value in investing in servicing this information, in disclosing and being transparent. So being closely linked to other elements of the business, particularly the CFO who really has a say on the money that’s being spent.
CDP works with over 300 of the world’s largest supply chain owners and they’re very keen on looking at their scope 3. Not because they just want to report on it, but because they want to actually dig into the data so that they can work with their supply chain to find out ways that they can lower their emissions.
A great example of this is Walmart. So the Walmart gigaton project is something that CDP was closely involved in setting up and they came in and then the project was to lower emissions by a gigaton in about 15 years and they came in and achieved that six years early and they did that because they looked at the data from their supply chain and they actively engaged with those members and supply chain in order to be able to help them change their energy mix, helping them to find renewables as an alternative.
WSJ:With fewer companies expected to attend COP this year, how will you encourage more of them to disclose?
Madera: I have the luxury of speaking to many international corporations as well as private companies and the main thing they say to me is they want clear policy because that allows them to have very clear steer on how it is that they can build their business to be a sustainable business.
What I would hope we can see more of particularly starting now and going all the way through to COP30 in Brazil, is that deeper engagement of companies that are working within these jurisdictions to be able to know really clearly what it is that they are going to be asked to contribute to those national goals and be an important part of them.
WSJ:Do governments influence company climate policy?
Madera: In 2024, I think over 70% of the world’s population has gone, or will go to the polls and obviously climate isn’t the only issue, but it is one of the issues in various places around the world.
Businesses do want clear signposting in terms of policies and in terms of government support or encouragement. More companies are continuing to disclose to ensure that they’re competitive.
But they’re also tending to be quieter about it than they were a couple of years ago. Before they were proudly screaming from the rooftops that they were transparent, and they were setting targets and they were making progress and these are their transition plans. What we’re finding is that they’re disclosing the data, but they’re doing so with less fanfare and less engagement with us to try and promote themselves.
So they’re keeping their heads below the parapets, it doesn’t mean that the data is not there and it’s not moving.
Gillian Held wanted her daughter to grow up around her grandparents. But moving from suburban Orlando back to New Jersey would have meant downsizing. So last year, Gillian’s parents sold their house and relocated to Florida several months before baby Nora was born.
“I said, ‘I don’t want to be Grandpa on a screen,’” said David Held, a retired New York City police officer who now helps watch his 7-month-old granddaughter two days a week.
Baby chasers are one of the cuddlier demographic trends contributing to America’s southward migration, a shift that is shaping everything from home building to municipal finance. Retirees have long sought out Southern states’ warmer weather and year-round golfing. Lower living costs and ample jobs have prompted a decade-long population boom in the South, and now those states boast a new attraction for many older Americans: their grandchildren.
Decades of rising stock prices and home values have left older Americans with much of the nation’s wealth, Federal Reserve data show. High mortgage rates are no obstacle to longtime homeowners who can sell their paid-off houses and buy new ones without a mortgage. In an era of more-flexible work, relocation doesn’t have to mean retirement. When grandparents live nearby, families can spend less on child care—and eldercare.
Housing-research firm Zonda publishes a yearly Baby Chaser Index ranking cities by growth in residents 25 to 44 and 60 to 79. Austin, Texas, Charleston, S.C., and Jacksonville, Fla., topped last year’s list. Ali Wolf , the firm’s chief economist, first heard about the trend six or seven years ago from home builders: “They would say, ‘We sold a house to a millennial and then we sold a house to their parents.’”
It all started in the 1960s, when baby boomers became the first generation to routinely move hundreds of miles for school or work, said Andrew Carle, who oversees a program in senior-living administration at Georgetown University. For much of the 20th century, parents in the U.S. raised their children close to where they grew up—at least those parents who hadn’t emigrated to escape persecution or dire poverty.
“We went away to college, we moved multiple times for our jobs,” said Carle, who is in his mid-60s. “We could move anywhere but we are choosing to move closer to our adult kids.”
A new job and lower home prices prompted Alonzo Emery ’s daughter and son-in-law to move with their two children from San Mateo, Calif., to the Austin area a decade ago. Emery, a retired vocational training program administrator, and his wife, Mary, followed two years later after a third grandchild was born needing medical treatment.
Texas’ culture and weather have been an adjustment for the couple, and they miss their son and son-in-law in California. But Emery, a former Arizona State University running back, gets to attend his 14-year-old grandson’s football games. He and Mary are learning dance moves from their 11-year-old granddaughter. “She’s put us on video,” said Emery, 73.
Moves like the Emerys’ have wide-ranging impacts for home building and even city budgets. The nation’s fastest-growing city is now the Austin suburb of Georgetown, Texas, where almost a fifth of the population lives in a single massive age-restricted housing community. This year, the city nabbed a triple-A bond rating.
The median age of repeat home buyers hit 61 this year, a four-decade high, according to the National Association of Realtors, with the most commonly cited reason for selling being the desire to be closer to family or friends. Twenty-one of last year’s 50 fastest-selling planned communities have built or are building age-restricted areas inside larger all-ages developments, according to consultant RCLCO.
Nashville, Tenn.-based Kinloch Partners, which rents out homes near large corporate offices in the Southeast, estimates that the retired parents of newly transferred executives live in around 10% of them.
“They have a guaranteed income. They don’t trash the house,” said Chief Executive Bruce McNeilage. Some pay a year of rent upfront.
For young families, the value of a nearby grandparent keeps growing. Child-care costs are up 6.4% over the past two years to a median monthly price of around $1,500 in major metro areas. The share of mothers with a child under 3 who work has risen over the past three decades to 66% last year from 58%, according to the Labor Department.
Gillian Held and her husband, Jordan, employ a nanny three days a week. Her parents take Tuesdays and Wednesdays, staying overnight at the couple’s home, where they have their own bedroom.
“We fully talk to them like they’re employees,” said Gillian, 32. “It’s an ongoing joke that when they want to go on vacation they have to take PTO.”
David and Cynthia Held , both 62, had long toyed with the idea of retiring to Florida. New Jersey’s cold winters and high living costs were wearing on them. Then in 2019, the Helds lost their son, Gillian’s brother Craig, to suicide at age 30. Living close to their daughter came to feel even more important.
By the end of 2022, Gillian and Jordan were married and talking about becoming parents. Home values where the Helds lived in Monmouth County, N.J., had shot up 27% over the previous two years, according to Zillow . David and Cynthia sold their house and moved in with Gillian in October 2023. A few months later, Cynthia fell in love with a place in a 55-and-over community in Port St. Lucie. They paid in cash.
The economics can be tougher for would-be baby chasers with grandchildren in the Northeast. Retired professor and author Michelle Herman and her husband are planning a move from Columbus, Ohio, to the New York City area to help raise future grandchildren. “Financially it makes zero sense,” she said.
There can be other snags. Herman contributes to a parenting advice column and recently counselled families considering a move to come to a clear understanding about how much child care the grandparents will provide. Grandparents should also do their own soul-searching before they relocate and have realistic expectations, she said.
“I actually have known people who’ve done this and came back because it didn’t work out,” Herman said.
A roaring market rally since the U.S. presidential election has driven up the price of everything from shares of technology and manufacturing giants to cryptocurrencies. Many investors are betting it has room to run.
Investors have stampeded into funds tracking U.S. stocks and picked up trades that would profit if the rally that recently sent the S&P 500 above 6000 for the first time reaches new heights.
U.S. equity exchange-traded and mutual funds drew nearly $56 billion in the week ended Wednesday, the second-largest weekly haul in records going back to 2008, according to EPFR data. Such funds have drawn inflows for seven consecutive months, the longest streak since 2021, when a dizzying market melt-up sent stocks to repeated records.
Driving the optimism? Many investors said they expect lower taxes and fewer regulations during Donald Trump ’s second term as president.
Dominic Rizzo, a technology portfolio manager at T. Rowe Price , said tariffs could boost U.S. manufacturing, driving a surge in domestic spending and investment. Other investors are simply breathing a sigh of relief that the election has passed.
The share of investors surveyed by the American Association of Individual Investors who said they were bullish jumped to 49.8% this past week, while the share of those reporting a neutral sentiment dropped to the lowest level since 2022. About 40% of those surveyed said the U.S. election made them more optimistic about the market.
“Animal spirits are alive and well right now,” Rizzo said.
Rizzo oversees shares of Nvidia and other tech giants. After a big run-up, he is still optimistic about the group ahead of Nvidia’s earnings report Wednesday. Investors are also fixated on the presidential transition and how it might shape the market’s winners and losers.
Some market watchers caution that investors might be too quick to latch on to policies that could boost markets, while ignoring plans that might stir inflation and market volatility.
Stocks wobbled at the end of the past week, and bitcoin retreated. Trump’s appointment of the vaccine skeptic Robert F. Kennedy Jr. as health and human services secretary pressured several stocks including Moderna and Pfizer . Shares of Tesla , which soared after the election and pushed the company’s market cap back above $1 trillion, have stumbled in recent sessions. Shares of Trump Media & Technology Group fell 12% for the week.
Still, the S&P 500 index and the Nasdaq Composite closed Friday within about 3.2% of their respective record highs. With just weeks left in 2024, the S&P 500 is on track to jump more than 20% for the year, the second consecutive year of gains of that magnitude. It is a back-to-back advance that has been seen only three times over the past century, according to Deutsche Bank.
Joe Johnson, 37, said he has waded into hot stocks including Nvidia, Tesla and a crypto play, MicroStrategy . His portfolio has swelled this year, and he is feeling so good about the market that he is thinking about pouring his cash pile into stocks. He is eyeing such industrial giants as Caterpillar and Deere , which he believes will benefit from a strong economy.
“I am bullish on the market,” Johnson said. “The euphoria everyone is feeling is warranted.”
Johnson said he is excited about Trump’s presidency and expects his policies to benefit his small business in Maryland, which sells boat-maintenance kits, engine parts and protective covers.
Many investors have piled into segments of the market such as small companies, which are especially sensitive to the economy.
The Russell 2000 has risen almost 2% since the election, and one of the largest exchange-traded funds tied to the index attracted $3.9 billion in inflows in a single session this month, the most since June 2007. Money managers, meanwhile, have increased positions that would pay out if the rally continued, driving net bullish bets in the futures market to the highest level in more than four years.
Some of the riskiest corners of financial markets are thriving too. Three of the top five days for trading in call options, trades that give the right to buy shares, have occurred this month, according to options records going back to 1973. That has pushed up the cost of bullish trades that would profit if stocks soared.
A frenzy of trading in cryptocurrencies sent bitcoin prices above $90,000 and unleashed a historic rush into crypto funds. Dogecoin, a speculative coin backed by nothing, shot up after Trump revealed plans to create a government-efficiency department called DOGE, to be co-led by Elon Musk , a dogecoin evangelist. Its $55 billion market cap now tops that of Ford Motor.
Trading in the over-the-counter market, which includes riskier securities such as penny stocks, has surged 27% in November from the same time last year, according to OTC Markets Group.
Some said stocks are looking expensive after their recent run. The S&P 500 recently traded at 22 times its expected earnings over the next 12 months, above its five-year average of roughly 20. A Bank of America strategist, Savita Subramanian, called market sentiment and positioning “dangerously bullish” in a note to clients Friday.
Bond investors have been sending a different signal, driving the benchmark 10-year Treasury yield to 4.426% on Friday, up from 4.072% around a month ago. They are banking on bigger deficits and higher inflation in the years ahead. Federal Reserve Chair Jerome Powell indicated Thursday that the central bank will take its time to trim interest rates, pressuring bonds and stocks.
One measure closely tracked by investors, the equity risk premium —or the gap between the S&P 500’s earnings yield and that of 10-year Treasurys—shrank close to zero, the lowest level since 2002, according to Dow Jones Market Data. That means the reward for owning stocks over bonds is dwindling.
“The market is awfully expensive to have a melt-up,” said Rob Arnott , the founder and chairman of Research Affiliates.
A beachfront home on Jupiter Island, Florida, that’s right next door to the home of tennis great Venus Williams has hit the market for $29.95 million.
Built in 1960, the house—which is about 20 miles north of Palm Beach—sits on more than 2.5 acres that’s heavily landscaped for privacy and has about 212 feet of beachfront.
“It’s nearly 3 acres on the ocean, which is very, very difficult to get,” said listing agent Shawn Elliott of Nest Seekers International, who brought the property to the market on Monday. He shares the listing with Stephanie Schwed.
Williams isn’t the only sports phenom in the neighbourhood—down the street, on the Intracoastal side, is Tiger Woods’s sprawling estate that features a golf practice area with three greens and has an estimated market value of more than $60 million, according to PropertyShark.
The seller of the newly listed home bought the property in early 2022 for $16.5 million using a limited liability company, records show. Mansion Global couldn’t identify the seller.
The yellow-painted, Bermuda-style home was designed by architect John Volk, who worked in and around Palm Beach from the 1920s until his death in 1984.
Across its more than 6,300 square feet, the property has six bedrooms and six and a half bathrooms, including an upstairs primary suite with front-to-back views and a ground-floor primary suite, which also has ocean views, Elliott said.
The home surrounds a courtyard pool, which is heated, and there’s a two-bedroom guest house that doubles as a pool house. The property also has a separate apartment for more guest or staff accommodations.
The seller installed new storm shutters, and there are also hurricane windows and a generator that serves the entire house.
From the backyard, the beach is accessible down a private path.
“The beach is beautiful—it’s white sand,” Elliott said. “You’re right on the ocean, it’s pretty special.”
