Dow Jones Sells Off As Apple Hits New High; Four Top Growth Stocks To Buy And Watch


Investor's Business Daily 07 September, 2021 - 11:09am 15 views

Wall Street sees as much as 56% upside for its 20 favorite stocks

DailyFX 07 September, 2021 - 09:35am

But there still may be catalysts for stock prices as the economy rebounds and interest rates remain low. A list of favorite S&P 500 SPX stocks among Wall Street analysts is below.

In Monday’s Need to Know column, Barbara Kollmeyer cites Matt Maley, chief market strategist at Miller Tabak + Co., who sees parallels between current market conditions and those of 2007, 1999 and 1929 that preceded three crashes.

Then again, John Buckingham, editor of the Prudent Speculator newsletter, shared this chart, which shows how the market recovered after declines brought about by 20 “frightening events” going back to 2010:

An investor with a crystal ball might time the market perfectly, selling everything at a market top and buying at the bottom. But the human tendency, even for an investor who “gets out in time,” is to buy back in too late and miss the rebound. For the vast majority of long-term investors, waiting out a bear market (one with a decline of at least 20%) tends to work out well if one can stay in for three years. If your investment horizon is shorter than that, stocks might not be for you.

Buckingham’s chart, above, shows how well the S&P 500 has performed since the COVID-19 crisis began. But here’s another way of illustrating how quickly the market can recover, especially when supported by government stimulus and Federal Reserve policy — the S&P 500’s price movement since the end of 2019:

From an intraday peak Feb. 10, 2020, through the pandemic trough March 23, 2020, the S&P 500 dropped 35%. It has gained 107% since that bottom. But if you look more closely, you can see significant pullbacks (based on intraday prices) of 11% between Sept. 2, 2020, and Sept. 24, 2020, and 9% between Oct. 10, 2020, and Oct. 30, 2020. Those weren’t fun periods for investors, but in hindsight they were blips. Investors fare best when they held on.

Federal stimulus and central-bank easy-money policies have made interest rates so low that some investors who would traditionally lean toward bonds and preferred stocks for income turned toward common stocks. So the forward price-to-earnings (P/E) ratio for the S&P 500 is now 21.4, based on consensus estimates among analysts polled by FactSet, compared to a 10-year average valuation of 16.5.

The 11 sectors of the S&P 500 tend to trade higher or lower than the full index on a P/E basis. Here are the sectors’ relative valuations to the full index and how those compare to average valuations:

It probably isn’t a surprise to see that the information technology sector, dominated by rapidly growing tech giants (in an index weighted by market capitalization) trades much higher relative to the full index than it did five years ago, or that the energy sector trades much lower.

But it is worth noting that several sectors still trade lower than usual, relative to the full index, even in a market that has lifted 88% of the S&P 500 this year. These include health care, which is up 20% in 2021, and the financial sector, up 29%.

Analysts who work for brokerage firms tend to shy away from negative ratings. Among the S&P 500, there are no companies with majority “sell” or equivalent ratings. But the analysts still have clear preferences for some stocks over others. Here are 20 stocks in the benchmark index with at least 75% “buy” or equivalent ratings, with the most upside implied for the next year, based on consensus price targets:

Click on the tickers for more about each company.

If you see any stocks of interest, you should do your own research and form your own opinion about how likely a company is to remain competitive over the next decade. Tomi Kilgore has just written a detailed guide to the information available on MarketWatch’s quote page. That’s a great way to begin digging into any stock.

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Stocks drift as unemployment benefits expire, earnings on tap

Fox Business 07 September, 2021 - 06:51am

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Seaport Securities' Teddy Weisberg and Prosper Trading Academy's Scott Bauer discuss future of the Fed and markets on 'The Claman Countdown' Floor Show

U.S. stocks were little changed Tuesday morning as traders returned to work following Labor Day weekend and assessed unemployment benefits that expired for over 7 million Americans and the impact on the U.S. economy.

The Dow Jones Industrial Average fell over 100 points or 0.35%, while the S&P 500 and Nasdaq Composite fell 0.20% and 0.01%, respectively.

Bond yields continued to climb after rising in the wake of last week’s disappointing jobs report. The benchmark 10-year yield was up four basis points at 1.36% after advancing three basis points on Friday.

In stocks, financials, including JPMorgan Chase & Co, Bank of America Corp. and Citigroup Inc., were trending higher as rising bond yields swung the yield curve steeper. 

Moderna shares also fell on speculation its COVID-19 booster shoot will not be approved by the FDA in time for the government's Sept. 20 planned push, while Pfizer-BioNTech's version is expected to meet the deadline. 

Elsewhere, Boeing Co. shares were in focus after The Wall Street Journal reported 787 Dreamliner deliveries would likely be delayed until at least October as it awaits regulatory approval. 

Separately, Irish low-cost carrier Ryanair Holdings plc, Boeing’s biggest customer outside of the U.S., said it will not make a new order for 737 Max jets due to a dispute over pricing. 

Meanwhile, Match Group Inc., the parent company of dating app Tinder, will join the S&P 500, replacing private-label pharmaceutical manufacturer Perrigo Company plc, S&P Dow Jones Indices said.  

In deals, Pimco agreed to buy Columbia Property Trust Inc. for $2.2 billion. 

In earnings, GameStop and Kroger among the companies set to report later in the week. 

In commodities, West Texas Intermediate crude oil slid 87 cents to $68.42 a barrel and gold lost $21.20 to $1,812.50 an ounce.

European bourses were lower across the board, with Germany’s DAX 30 falling 0.32% and France’s CAC 40 slipping 0.12% despite eurozone growth being revised higher. Elsewhere, Britain’s FTSE 100 declined 0.35%.  

In Asia, Hong Kong’s Hang Seng index jumped 0.73%, Japan’s Nikkei 225 climbed 0.86% and China’s Shanghai Composite surged 1.51%.  

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Wall Street Falls at Open on Growth Fears; Dow Jones Down 175 Pts By 07 September, 2021 - 12:00am -- U.S, stock markets started the holiday-shortened week on a subdued note, as a high-profile downgrade of U.S. growth forecasts weighed on sentiment amid a broad lack of any more concrete news.

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was down 173 points, or 0.5% at 35,195 points, while the S&P 500 was down by 0.2% and the Nasdaq Composite was up by 0.1%, as investors once again sought relative safety in longer-dated growth plays. 

Earlier. Goldman Sachs (NYSE:GS) cut its growth forecasts for gross domestic product in the fourth quarter to 5.5% from 6.5% earlier, a move that followed hard on the heels of its second downgrade to the outlook for the current quarter in as many weeks. Having originally expected the U.S. economy to expand at an annualized rate of 8.5% through the summer quarter, Goldman now sees growth of only 3.5%, thanks to the spread of Delta variant Covid-19 and the fading effect of fiscal stimulus. 

The downgrade came after August's labor market report showed a much bigger-than-expected hit to hiring from the latest wave of the pandemic. The U.S. economy created only 235,000 net nonfarm jobs through the middle of the month, less than a quarter of July's gains and well below the 750,000 expected. 

Boeing (NYSE:BA) stock fell 1.9% after a decision by Ryanair, the company's biggest customer outside the U.S., to end talks over a large order for the 737 MAX 10, its largest single-aisle model. 

However, there were still notable bright spots: AMC Entertainment (NYSE:AMC) stock rose 6.6% to its highest in a month after news that Disney's new Marvel superhero movie, Shang-Chi and the Legend of the Ten Rings, had taken in over $90 million on its debut weekend at the box office in North America. CEO Adam Aron said via Twitter (NYSE:TWTR) that the company beat its own record for Labor Day weekend revenue as a result, adding that the figures topped comparable figures for 2019 for the first time. 

Other big gainers included Match Group (NASDAQ:MTCH) stock, which rose by 6.5% after S&P Dow Jones said it will include the dating site operator's stock in the S&P 500. That will force passive investors benchmarked to the index to include it in their portfolio.

Going in the other direction, Moderna (NASDAQ:MRNA) stock fell 0.4% after news of a third death in Japan among people who had received its Covid-19 vaccine from a contaminated batch. The stock also suffered a little from comments over the weekend by U.S. health supremo Anthony Fauci saying that it was lagging Pfizer (NYSE:PFE) and BioNTech in readying materials to support booster shots of its vaccine.  Rival vaccine maker Novavax (NASDAQ:NVAX) stock rose 7.0%, meanwhile, after Japan sealed a deal for 150 million doses of its Covid-19 drug.

Elsewhere in the pharma world, Genmab ADRs (NASDAQ:GMAB) fell 2.2% and Amgen (NASDAQ:AMGN) stock fell 1.9% after Morgan Stanley (NYSE:MS) analysts downgraded both to Equal Weight on valuation concerns after their recent rallies.

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Dow slips more than 150 points to start the trading week as investors worry about delta's impact

CNBC 06 September, 2021 - 05:12pm

The Dow Jones Industrial Average fell on Tuesday amid lingering concerns about the delta variant's impact on the economic reopening.

The Dow dropped 180 points, dragged down by a 2% loss in Boeing's stock. The S&P 500 fell 0.2%. The Nasdaq Composite rose 0.2%, notching a new intraday record. The NYSE was closed on Monday for Labor Day.

Goldman Sachs downgraded its economic outlook over the weekend, citing the delta variant and fading fiscal stimulus. Goldman now sees 5.7% annual growth in 2021, below the 6.2% consensus. The firm cut its fourth-quarter GDP outlook to 5.5%, down from 6.5%.

"The hurdle for strong consumption growth going forward appears much higher: the Delta variant is already weighing on Q3 growth, and fading fiscal stimulus and a slower service sector recovery will both be headwinds in the medium term," stated the Goldman note.

Morgan Stanley downgraded U.S. equities to underweight on Tuesday.

"We see a bumpy September-October as the final stages of a mid-cycle transition play out," wrote the strategists led by Andrew Sheets. "We continue to think this is a 'normal' cycle, just hotter and faster, and our cycle model remains in 'expansion'. But the next two months carry an outsized risk to growth, policy and the legislative agenda."

Boeing shares were lower after the Wall Street Journal reported deliveries for the 787 Dreamliner would likely be further delayed. PPG Industries, a paint maker, warned that sales may fall short this quarter because of logistics issues and higher commodity costs. Shares of PPG Industries ticked 2% lower in early trading.

Drug stocks including Johnson & Johnson, Merck and Amgen were slightly lower after Morgan Stanley downgraded the three stocks.

The S&P 500 is flat for the month of September, a month that historically has challenged markets. The month averages a 0.6% decline, the worst of any month, with a positive rate of just 45%, according to CFRA.

In regular trading Friday, the Dow and S&P 500 fell after the August jobs report came in short of expectations, highlighting continued concern about the spread of Covid and its delta variant. Nonfarm payrolls increased by 235,000 in August, the Labor Department reported, but economists surveyed by Dow Jones expected 720,000 jobs.

Year-to-date, the Dow is up 15%, the S&P is up 20.4% and the Nasdaq Composite is up 19.3%, although investors and analysts are still on the lookout for a major correction in September.

"Admittedly, passive investors have yet to feel pain," Bank of America said in a note Friday, adding that "2021 represents yet another year during which the [S&P 500] has crushed it, but some signs indicate that it may be time to start getting 'pickier' when it comes to stocks."

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