FINSUM + Magnifi: Goldman Says these S&P Losers Could become Outperformers
April 20, 2021
Q1 Earnings are starting to roll in for many companies and this presents an opportunity. Regression to the mean is almost an inevitability in the stock market, but timing it is difficult. But Goldman is advising its clients that 13 companies lagging the S&P 500 by 6% over the past month are going to post better earnings reports than Wall Street projects. These companies are Activision Blizzard, Air Products and Chemicals, CF Industries, Charter Communications, Edison International, Enphase Energy, Everest Re Group, Fiserv, Global Payments, Intercontinental Exchange, Leggett & Platt, McKesson, TE Connectivity, and T-Mobile. As many stocks are trading at record highs these underperformers could turn to outperformers at the turn of the next earnings report.
FINSUM + Magnifi: BofA says Big Sell Signs are Flashing
(March 2021)
The post-pandemic bull run has touched the breaks, but not necessarily stopped the momentum. However, Bank of America’s Sell Side Indicator, which informs sell-side strategists how much of their portfolio should be allocated to equity. The Indicator jumped up near a percentage point in February after a rise in January as well. BofA Quant, Savita Subramanian indicated that the indicator is in the shell region, and the last time it reached this high was June 2007. Rising bond yields are also pointing to a let-up in equities. Finally, the Wilkshire 5000 (a total stock market indicator) divided by the annual U.S. GDP is Warren Buffet's favorite aggregator and is pushing to record highs. Rising interest naturally puts pressure on stocks anyway and maybe it gives investors an alternative to equities.
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FINSUM + Magnifi: This is the Best S&P 500 “Buy” Sign Since Before the Pandemic
(February 2021)
January and early February offered some rough times for investors. The two-week meme stock debacle had most investors’ hearts skip a beat and fear the entire market was in a bubble. However, applying some cold, rational logic to market movements yields a very nice picture. The reality is that VIX Index, Wall Street’s so-called fear gauge, just fell below 20. To put that in perspective, it is the first time that has happened since February 2020 (yes, BEFORE the pandemic). This means fear is leaving the market and could set the stage for more buying. According to one Wall Street strategist, “This is a positive divergence. Stocks churning but VIX falling. This suggests that ‘fear’ is receding from the market”.Read more
FINSUM + Magnifi: “Raging” Rally is Starting says Morgan Stanley
(February 2021)
According to both Morgan Stanley and Goldman Sachs, last week’s retail-driven chaos was nothing but a blip on the bull market radar. After a significant pullback last week (perhaps more significant psychologically than in pure price action), Morgan Stanley says a “raging” rally is starting. Like Goldman Sachs, who is now calling for a 16% gain in the S&P 500 this year, Morgan Stanley thinks the market is going to continue on a strong upward trend. The banks contend that the underlying economy has a lot of upside and thus markets are going to have a nice economic and earnings tailwind behind them.
Source: fnlondon.com
FINSUM + Magnifi: Putnam Warns Fresh Stimulus is a Major Risk to Markets
(January 2021)
Despite all fears, markets had a fairly strong year in 2020. Why? The answer is pretty clear. Other than some general optimism about how large cap tech would perform during the pandemic, the real savior was huge government stimulus which infused massive amounts of cash into the economy and kept the US out of its worst recession since WWII. Fast forward to January 2021 and we have another major stimulus package on the horizon being pushed by Biden and the Democrats. While many investors might be elated at the prospect, Putnam Investments is warning investors that this could be a death knell for the market. The reason why is that a major new stimulus package would give the market a “sugar high” and potentially cause a melt-up that inflicts serious pain soon thereafter.
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FINSUM + Magnifi: Goldman Publishes a Crucial Call on the S&P 500
(January 2021)
The market has been a bit choppy to start the year, including a loss over the last five days. The weakness of last week came as somewhat of surprise to investors as Biden announced that a nearly $2 tn stimulus package was in the works. That said, Goldman Sachs is undeterred in their view of the economy. In fact, it is exactly their view of the economy that drives their forecast. The bank put out a report last week that calls for a 14% gain in the S&P 500 this year. The reason why is that Goldman believes there is going to be GDP growth of 6.4% this year compared to a consensus estimate of 4.2%. Alongside this expansion, the bank thinks earnings per share will spike by 31% compared to a decline of 17% in 2020.
Source: Market Watch
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FINSUM + Magnifi: Wall Street Warns of Big S&P 500 Drop if Biden Wins
(October 2020)
Wall Street has been all over the place in its prognostications for this election. The clear market trend over the last few weeks has been higher alongside gains in the polls by Biden. Some think a Biden win would be good for markets, but today a Wall Street strategist, David Kalayjian, is warning of a 5% drop in the S&P 500 if Biden emerges victorious. “A lot of people are worried because they don't have the details of the Democrats policies. So, the potential blue wave causes uncertainty and will be negative for the markets for a long time”, says Kalayjian.
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FINSUM + Magnifi: BlackRock Says it is Very Bearish on This Sector
(October 2020)
BlackRock is the largest asset manager in the world, commanding over $7 tn of assets. So when it gives its opinion on an asset class, it is usually worth listening to. Well, the asset manager’s CEO has just issued his view on a key area—emerging markets. Larry Fink, CEO, says that he is bearish on emerging markets for multiple reasons. Firstly, COVID-19 has greatly raised the risk premia for holding EM securities, and he says many EM leaders don’t understand what it will take to restructure their debts, which seems like a necessity for some. Additionally, Fink says that the move towards stronger environmental standards means money will leave emerging markets. “When we talk about climate change, and we think that’s a big issue and a reallocation of capital … part of that reallocation of capital is movement out of the emerging world”.
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FINSUM + Magnifi: The Biggest Market Impact of COVID is Just Beginning
(September 2020)
While the pandemic has hit the economy and markets hard, the real long-term effect that the recession could have on the economy likely hasn’t even started yet. What is that effect you might ask? Deflation. When the pandemic first hit there were worries about inflation because of price spikes in certain consumer goods. However, over time those have proven to be transitory, and instead, what is taking hold is the realization that average costs are falling in many parts of the economy, such as rent, medical care, and college tuition. For example, if you strip out housing and used car prices, the latter of which has surged during the pandemic, consumer prices as a whole fell in September.
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FINSUM + Magnifi: Funds That Enable You To Invest in Diversity
(September 2020)
At its heart, ESG investing is about risk mitigation. While morality is at the heart of the endeavor, ESG is an attractive investment for some people because it may screen out some risks while earning good returns. While climate change gets the bulk of attention within ESG, diversity is an increasingly important component in 2020. So how can investors specifically invest in companies who are making advances in the area of diversity? Here are three ETFs to consider. The first is the SPDR SSGA Gender Diversity ETF (ticker: SHE); secondly is the Pax Ellevate Global Women’s Leadership Fund (PXWEX). Both funds focus on companies with gender-diverse leadership teams and policies that support the empowerment of women in the workplace. Another fund, focused on racial diversity is the Impact Shares NAACP Minority Empowerment ETF (NACP), which invests in companies that are taking real action to fight for racial justice.
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