Displaying items by tag: stocks

Tuesday, 11 August 2020 15:58

The Best ETF for Playing COVID Retail

(New York)

There has been a lot of negative press about the fate of retail under COVID, and with good reason. Brick and mortar businesses have been devastated and the bankruptcies have been relentless. However, one of the less noticed aspects is that many ecommerce businesses are doing very well. In fact, some retail ETFs, like the Amplify Online Retail ETF (IBUY) have been surging as stocks like Carvana, Overstock.com, and Peloton have seen their shares soar.


FINSUM: Ecommerce is a great bet for right now and for the foreseeable future. In its most basic sense, all COVID did to retail was accelerate the shift to ecommerce into a much faster gear. It was like a five-year jump in four months. There is no reason to expect that to revert any time soon.

Published in Eq: Value

(Washington)

A lot of investors are worried about what will happen to stocks if Biden wins, and even more worryingly, if the Democrats sweep the election. The general fear is that without at least a Republican Senate, the Democrats could give in to their more leftist impulses and create policies which would be detrimental to the financial-economic paradigm. However, UBS argues that even if Biden hikes corporate taxes up to his planned 28%, he will offset that with big economic spending to accelerate the recovery, which should more than make up for the loss of profits because of taxes.


FINSUM: This makes pretty good sense. Even if taxes are raised, it is not like the Democrats are planning to balance the budget. Large amounts of deficit spending will likely help keep stocks afloat.

Published in Eq: Total Market

(New York)

There has been a lot of hype about cloud computing for the last few years. Growth in the sector has been massive, and Amazon Web Services (Amazon’s cloud business) has become a key indicator for investors. A new report out today shows why now might be a good time to invest more in the sector. The report shows that large enterprises are planning to increase their overall spending on cloud product, and by 2021, the cloud will account for 32% of overall tech budgets versus 30% today. More impressively, spending on the cloud by large enterprises is up 59% since 2018 to $74m annually.


FINSUM: A 2% shift in tech spend into the cloud alone is a good driver of business. It is probably a good medium to long-term bet to take a look at a handful of cloud stocks.  Check out at Global X's CLOU for a good cloud computing ETF.

Published in Eq: Tech
Friday, 31 July 2020 08:47

A Bold Play to Get High Yields

(New York)

Yields have almost never been lower. In some cases, they are at all-time lows. This has made income-oriented investments a real challenge. So how can investors get great yields right now? Well the first thing to bear in mind right now is that to get really juicy yields, one is going to have to take some risk. With that understood, take a look at mortgage REITs. Mortgage REITs took a huge hit when the pandemic began for fear of declining credit quality in the underlying mortgages. To-date they have only recovered somewhat. However, two of the biggest—Annaly (NLY) and AGNC Investment (AGNC)—are sporting yields of 13.5% and 10.6% respectively.


FINSUM: Mortgage REITs have obvious risks right now given ongoing unemployment, but with prices low and yields high, they look like they have a place in the portfolio.

Published in Eq: Real Estate

(Washington)

There are just under 100 days left until the election and there is a lot on the line for markets. The economic approaches of the Trump administration and the potential incoming Democrats could not be more different, which means there are huge implications for stocks. Here is the good news—over the last 40 years, markets have historically risen leading up to the election, and volatility has usually decreased. Now the big possible twist is the COVID pandemic, a major factor that has not occurred during an election cycle. The most comparable election cycle seems to be 1968, when the US was going through similar levels of social unrest. The S&P 500 gained more than 3% in the run up to that election.


FINSUM: As we see it, the two big risks are COVID (and its economic consequences), and a leftward move by Biden. The Fed will certainly soften the blow of the former, while the latter remains.

Published in Eq: Total Market
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