(New York)

Wondering where the market is headed? (so is everyone!) Well, Goldman Sachs put out a pretty unequivocal opinion about it today. Despite the market being at all-time highs when the country is in a recession and unemployment massive, the bank says that the S&P 500 will rise another 7% to close out the year. The only damper in the bank’s forecast is the election. Goldman says it is assuming a Democratic victory, and that could cause higher taxes that could dent the market a bit. GS also says Treasury yields will fall to 1.1% by the end of the year.

FINSUM: So we have two big competing feelings here. On the one hand, with the Fed so strongly in support of markets (and another fiscal stimulus likely), it seems like it could be smooth sailing. On the other hand, 51% of the entire market’s gain since the bottom in March has come from five stocks. On the whole, we think gains are more likely than losses.

(Beijing)

If one thing has been clear over the last couple of years, it is that US-China relations are getting worse. It started earlier in Trump’s term and has escalated in a tit-for-tat battle over the last couple years. Some refer to it as a great “uncoupling” while others say it is a new cold war. Whatever you call it, there are a handful of sectors that will do well as the situation unfolds. One such sector is automation and robotics companies. These companies are likely to do very well as US businesses are forced to re-shore manufacturing from China and seek out automation to make the return more economical.

FINSUM: A major decoupling will be a very ugly event. US companies do $500 bn of sales in China each year. The automation play makes sense. Check out the Robotics ETF (ROBO).

(New York)

Real estate, especially residential real estate, is one of the sectors that has held up much better under COVID than many expected. With such hefty job losses, many thought early on that the market might suffer seriously. However, home prices have held steady, and in a bullish sign, homebuilders are feeling very confident. The bullishness in the sector seems to stem from a pair of factors—desire for single family homes during COVID, and exceptionally low interest rates. The Homebuilders index rose to a measure of 78 in August, up from 72 in July, setting a record that goes back to 1998.

FINSUM: This is a great sign for homebuilding stocks, and the economy more generally. It is a sign that the American consumer—at least the subset that is in the market for houses—is holding up okay. That said, it is the lower end of the socioeconomic hierarchy than seems to be suffering the most from COVID lockdowns.

(San Francisco)

Large cap tech has been doing great and getting tons of media attention. Within the big rise, though, Apple has seen relatively less attention. The reality is that it may be time to buy. Historical studies have shown that the best time to buy Apple stock is in advance of new iPhone releases, and it is now confirmed that a new iPhone is coming soon. And it is not just any iPhone, it is Apple’s first 5G iPhone, which the company said on a recent earnings call would start shipping in October.

FINSUM: Research has shown that the 90-day period preceding the launch of a new phone is an ideal time to buy. Seems like a good opportunity to consider Apple.

(Memphis)

FedEx and other logistics providers have risen alongside other stocks, but their gains have not been nearly as prolific as some of the ecommerce providers they service. However, that may be about to change. Multiple Wall Street analysts are changing their tune on the company, saying that the stars are aligning for the stock. In particular, UPS is starting to raise prices, which will help FedEx with profitability alongside the huge explosion in ecommerce volumes that has coincided with people staying at home. Furthermore, as a vaccine is developed, FedEx and other logistics providers will need to deliver millions of doses of vaccines, which will be another boost.

FINSUM: Two big factors here really—UPS and USPS are raising prices, allowing breathing room for FedEx; and…FedEx is a leader in temperature-controlled shipping, which is what will be needed for vaccines.