Displaying items by tag: stocks

(New York)

The market has been doing very well since October 30th, up around 9%. Goldman thinks even bigger gains are coming for the S&P 500. The bank has been encouraged by investors’ response after the election and thinks that the vaccine is really in the driver’s seat. The bank’s research team has significantly upgraded their earnings forecasts for next year and 2022 based on the better-than-expected recovery. According to Barron’s, a few assumptions underpin Goldman’s outlook, “at least one vaccine becoming widely available in the U.S., less drastic changes in policy because Congress is most likely to be divided, and the continued V-shaped economic recovery”. Goldman’s official forecast for the S&P 500 at the end of 2022 is 4,300 and a 20% gain from now through the end of 2021.

FINSUM: The “continued v-shaped recovery” is the most volatile aspect of these assumptions, but they also discounted a potentially positive one—another stimulus package. The forecast seems reasonable.

(New York)

Okay maybe it’s not a “boom” but it is certainly a “boomlet”. Alongside all the uncertainty in markets surrounding the election, value stocks have been having a moment in the sun. The reason why is interesting and seems to be two-part: one aspect is idiosyncratic, the other more macro. On the idiosyncratic front, many bank employees tend to get very conservative with their investments at this time of year because many financial companies end their fiscal year’s before December 31st. What those employees do is sell their winners and buy beaten up value stocks. It happens every year, but the effect might be bigger this year because tech stocks have gained so much. On the macro front, one big thing helping value stocks is that the COVID vaccine has given hope to “normal” economy companies. Those stocks have done very poorly this year, so are squarely in the “value” category.

FINSUM: If a vaccine is widely available soon—and people actually take it—a return to some version of the pre-COVID economy is seems likely. That said, things will have changed and there will be some stocks that continue to struggle. Choose wisely.

(Washington)

The stock market is going to enter a new era as Joe Biden—in all likelihood—becomes president. As that happens, investors need to start thinking about how to align their portfolios. While all industries will likely be affected to some extent, there are a handful that might be impacted the most acutely, such as energy, autos, tech, manufacturing, agriculture, banking, pharma and healthcare. In autos, Biden’s push for more efficiency will likely benefit Tesla and GM, both of whom are looking to sell more electric vehicles. Tech looks like a real risk area as the chances for more data/anti-trust regulation look higher, though those could be somewhat mitigated by a red Senate. On the manufacturing front, Biden is expected to use government stimulus to boost domestic manufacturing, In banking, executives are bracing for more regulation, but changes are not expected at a fast pace, so nothing too shocking seems likely in the near-term. Pharma looks vulnerable as Biden is committed to bringing drug prices down; that said even Pharma companies don’t expect that Democratic policies will hurt their margins worse than Trump’s proposals. In insurance and healthcare, the picture is mixed. Insurers would almost certainly be challenged by increasing amounts of government coverage, but hospitals would likely benefit from providing care for millions of newly insured Americans.

FINSUM: Biden and the Democrats’ plans will reverberate through the market in the coming months, though not as much as they might if the Left grabs control of the Senate in January. Generally, we agree with that a divided government would be most beneficial to markets.

(New York)

The market has been turned on its head. For the last nine months there has been a clear delineation in the market: stocks that benefit from work-from-home and other social distancing measures thrive, and those shares which did well in the “old” economy struggle. Yesterday, that got turned upside. The market surged on the most legitimate and detailed announcement of vaccine success yet, and that sparked a reversal of fortune for WFH stocks. Despite the Dow rallying almost 5%, the Nasdaq fell well over 1%, showing the strong divergence in shares. Stocks like Boeing, Raytheon, GE, American Airlines, and Delta Airlines rocketed, often jumping by 15% or more. The cruise lines were up by as such as 40%! But the big winners of the year—like Zoom—fell big-time, with Zoom’s shares down 17%.

FINSUM: If you were short the COVID-economy yesterday you did very well. The thing is, this market seems to be getting a little ahead of itself because of the fairly long timeline for approval and distribution of the vaccine.

(New York)

The election couldn’t really be more stressful. Investors are anxious not only on the investment front, but on the personal front as well. With that in mind, here are five stocks that should do well no matter who ends up in the White House: Abbott Laboratories (ABT), Newmont (NEM), SBA Communications (SBAC), Roper Technologies (ROP), and Carlisle (CSL). Two things that seem likely to do well no matter who wins the election are companies which provide COVID tests and gold. COVID testing is an obvious one—there needs to be more COVID tests available, and faster/better quality tests. Abbott Laboratories has a $5 test that gets results in 15 min and are connected to a mobile app. Gold seems equally likely to do well as inflation concerns are rising alongside the weakening Dollar, growing US debt issuance, and slumping oil prices.

FINSUM: We think ETFs covering large sections of companies who will be in COVID testing are a good buy. Gold seems like a smart bet too given the likely growing US debt and weaker Dollar.