Tag: stocks

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Stocks mixed as tech-led drop extends, crude oil steadies

Stocks were mostly lower Tuesday with technology stocks under further pressure, as investors further mulled the market implications of Federal Reserve Jerome Powell’s renomination to lead the central bank.

The S&P 500 ticked down. A day earlier, the blue-chip index had set an all-time intraday high before pulling back to end in the red, with a drop in technology stocks weighing. 

U.S. West Texas intermediate crude oil futures (CL=F) recovered losses and rose after dropping more than 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} earlier in the morning. The move came after the White House announced it would be releasing a total of 50 million barrels of oil from the Strategic Petroleum Reserve (SPR), in tandem with similar moves from China, Japan, India and South Korea and the U.K., to try and ease rising energy prices with additional supply. 

Shares of Zoom Video Communication (ZM) slid even after the company posted better-than-expected quarterly revenue growth and full-year guidance, with usage of the video conferencing company’s software slowing amid the reopening. Companies including Nordstrom (JWN), The Gap (GPS) and Autodesk (ADSK) are set to report quarterly results on Tuesday.

Federal Reserve Chair Jerome Powell’s renomination to the top leadership position at the central bank captured market attention this week, with many investors reacting favorably to the likelihood that the Fed’s previously telegraphed monetary policy framework would remain in place with Powell’s reappointment. That includes expectations for current asset-purchase tapering to take place through the middle of next year, and for at least one interest rate hike to take place before the end of 2022.

“Continuity at a time of such extraordinary uncertainty is certainly welcome news. We have extraordinary uncertainty because we’re pivoting from the phase of the cycle where the Fed had been shoring up the recovery from the pandemic-induced recession, and … it did avoid a meltdown in financial markets,” Diane Swonk, Grant Thornton chief economist, told Yahoo Finance Live. “But now we’ve got very easy financial market conditions and we’re dealing with inflation. And having to pivot to dealing with inflation and tamp it down without derailing the recovery — that’s a very hard thing to pull off. We’ve not seen the Fed actually chase inflation down since the early 1980s.”

President Joe Biden also nominated Fed Governor Lael Brainard – previously viewed as a potential candidate for the Fed Chair position to replace Powell — as Vice Chair of the Board of Governors for the Fed. With these two nominations in place, market participants have turned their attention to who might fill he three vacant and soon-to-be vacant seats on the Fed Board, which includes the key Vice Chair for Supervision role. Biden said in a press statement Monday morning he expected to announce those appointments “beginning in early December.”

“Political decisions like this are competitions between affinity — you like someone in your own party — and convenience — what can you get the Senate to do for you, and will markets receive it well? You have to view the Powell-Brainard picks as part … of a bigger package,” Vincent Reinhart, Dreyfus-Mellon chief economist and macro strategist, told Yahoo Finance Live. “The White House is going to have three new governors to appoint, and presumably that’s going to tilt more progressive. So bottom-line, six months from now, the group of people that Chair Powell has to wrangle to make decisions is going to be more dovish than it is today.”

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9:49 a.m. ET: U.S. services PMI falls to two-month low, while manufacturing PMI rises to two-month high: IHS Markit

Closely watched indices tracking economic activity in both the U.S. services and manufacturing sectors showed a divergence in early November, with the supply constraints and rising prices dampening growth especially in private service industries. 

IHS Markit’s preliminary November U.S. services purchasing managers’ index (PMI) unexpectedly fell to 57.0 from 58.7 in October, marking the lowest level in two months. Consensus economists had been looking for the index to rise to 59.0, according to Bloomberg data. Readings above the neutral level of 50.0 indicate expansion in a sector.

The firm’s manufacturing PMI, however, rose to a two-month high of 59.1 and matched expectations. The manufacturing PMI had been at 58.4 in October. Taken together with the drop in the services PMI, the composite PMI for November fell to 56.5 from 57.6 in October, in a sign of slowing overall growth. 

“The slowdown underscores how the economy is struggling to cope with ongoing supply constraints,” Chris Williamson, chief business economist for IHS Markit, wrote in a press statement. Although supplier delivery delays eased to the lowest for six months, the lengthening of lead times remains far greater than anything seen prior to the pandemic, restricting output relative to demand and once again causing prices to rise sharply.” 

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9:34 a.m. ET: S&P 500, Nasdaq extend declines as tech drop continues

Stocks open mixed on Tuesday, with both the S&P 500 and Nasdaq declining as technology stocks added to Monday’s losses. 

The Dow hovered little changed, with financials and other cyclical stocks rising further following Federal Reserve Chair Jerome Powell’s renomination to keep his role as leader of the central bank. Goldman Sachs, Chevron and JPMorgan Chase outperformed in the 30-stock index, while Microsoft, Salesforce.com and Nike weighed to the downside. 

Treasury yields also gained across the long end of the curve. The benchmark 10-year yield rose more than 2 basis points to drift just below 1.646{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. 

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7:33 a.m. ET Tuesday: Stock futures mostly lower 

Here’s where markets were trading Tuesday morning:

  • S&P 500 futures (ES=F): -1 point (-0.02{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,678.75

  • Dow futures (YM=F): +21 points (+0.06{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,592.00

  • Nasdaq futures (NQ=F): -26.75 points (-0.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,355.25

  • Crude (CL=F): -$0.42 (-0.55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $76.33 a barrel

  • Gold (GC=F): -$9.30 (-0.51{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,797.00 per ounce

  • 10-year Treasury (^TNX): +2.6 bps to yield 1.651{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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6:06 p.m. ET Monday: Stock futures open slightly higher

Here’s where markets were trading Monday evening:

  • S&P 500 futures (ES=F): +7.5 points (+0.16{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,687.25

  • Dow futures (YM=F): +49 points (+0.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,620.00

  • Nasdaq futures (NQ=F): +28.5 points (+0.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,410.50

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 8, 2021. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 8, 2021. REUTERS/Brendan McDermid

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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Why these are the worst stocks to own right now: Goldman Sachs

Not every sector of the market is a longer-term buy even with stocks continuing to be on autopilot, warn strategists at Goldman Sachs. 

Some of the worst stocks to own in a U.S. economy trying to claw back from the COVID-19 pandemic are those with high exposure to tight labor markets, which runs the risk of pressuring profit margins as wages are hiked.

“Labor market tightness will remain a challenge during the next few years. Investors should avoid stocks with high labor costs relative to EBIT [earnings before interest and taxes],” says David Kostin, Goldman Sachs chief U.S. equity strategist, in a new research note to clients. 

Several of the companies that fall under this category, per Goldman’s analysis includes IBM (IBM), Raytheon (RTX), HCA Healthcare (HCA), FedEx (FDX) and Dollar General (DG).

On the other hand, Kostin and his team think reopening stocks with cyclical exposure are the better bet at the moment. 

Explains Kostin, “While virus counts are now rising and weighing on reopening stocks, as the winter wave passes, declining virus and inflation headwinds should provide a near-term boost to corporate revenues and margins for the businesses most exposed to these challenges.”

Companies such as Best Buy (BBY), Home Depot (HD), Lowe’s (LOW), D.R. Horton (DHI), KB Home (KBH) and Lennar (LEN) appear positioned for a cyclical upswing, points out Kostin.

In the near-term, however, both high labor exposure stocks and reopening stocks may work well for investors as markets digest recent Federal Reserve news.

Monday morning, President Biden renominated Powell as Fed chief, ending weeks of speculation on the topic. Biden also nominated Lael Brainard to the position of vice chair. Both are seen as monetary policy doves by market participants, hinting the Fed may be inclined to push off interest rate hikes in 2022 even with inflation remaining elevated.

In turn, that would be good for valuation multiples.

Stock markets soared on the news, with the Dow Jones Industrial Average rising by more than 300 points at one point early in Monday’s session.

“With the Fed on hold until mid-year 2022 and bond yields below 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, equities will remain the asset of choice for both institutional and retail investors,” contends Kostin. 

The closely watched strategist sees the S&P 500 hitting 5,100 by the of 2022, up about 10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from current levels.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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Top Street analysts are bullish on stocks like Netflix & GM

The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, March 16, 2021.

Rebecca Cook | Reuters

Earnings season is drawing to a close, and companies have offered investors and analysts insight into their plans for growth in the coming quarters.

For a number of firms, this has been an opportunity to showcase how they’re adapting to new realities, be it the growing popularity of electric vehicles or the unrelenting demand for semiconductor chips.

To that effect, some of Wall Street’s top analysts have highlighted these five companies that have attractive long-term prospects for investors, according to TipRanks, which tracks the best-performing stock pickers.

General Motors  

The green tidal wave has continued its rampage across the industry, with multiple names going public to huge valuations many have found difficult to stomach. While it may be more convenient for smaller more flexible pure-play electric vehicle (EV) companies to focus on their condensed product offerings, General Motors (GM) does not intend to be left behind. (See General Motors Stock Analysis on TipRanks) 

Daniel Ives of Wedbush Securities reiterated his bullish hypothesis on the stock, arguing that the company is just now garnering recognition by Wall Street for its grand plans. He wrote that the “growing EV appetite among investors for new innovative EV stories, the vertical integration capabilities of GM and conversion of its massive customer base to electric vehicles over the coming years represents a transformational opportunity.”   

Ives rated the stock a Buy, and assigned a bullish price target of $85.  

The analyst added that if near-term issues such as the global chip shortage and the recall fallout on the Chevy Bolt can be mitigated, the company will have a clear runway to doubling its revenue by 2030. Ives expects that if GM executes on its EV promises, the share price could move even higher than his target.  

Big plans aren’t the only thing in GM’s toolbelt, as it has developed “game changing” Ultium battery technology, which Ives believes will help capture market share. However, he does not foresee Tesla (TSLA) falling from its dominating perch over the nascent industry. 

Additionally, GM has been developing software-and-services subscription packages to accompany its strong pipeline of EVs. Ives is encouraged by the prospect of the vast array of opportunities for monetization in this field for GM, noting that up to $2,000 per car per year could be generated. 

Out of more than 7,000 analysts, financial aggregator TipRanks rates Ives as No. 22. His ratings have been successful 82{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the time, and have returned him an average of 64.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} per.  

Wix.com 

Web development company Wix (WIX) hit a rough patch over the first half of the year, as it was up against tough comparisons from 2020’s boom in online business and e-commerce which helped bring in high valuations for the stock. Those tough times seem to be in the rearview mirror for Wix, according to Mark Mahaney of Evercore ISI. “It turns out that the world didn’t decide to stop building websites,” he said.

(See Wix.com Risk Factors on TipRanks) 

Mahaney rated the stock a Buy, and assigned a price target of $255.  

The analyst noted the company’s recent strong earnings report, in which it printed a beat on revenue and improved metrics in key sectors. He said that newly acquired users, average revenues per user and conversion levels were each beyond expectations laid out by the company.  

Global shifts during the Covid-19 pandemic turned having an online footprint “a must-have rather than a nice-to-have for businesses globally,” Mahaney said. He was encouraged by Wix’s exposure to the worldwide ecommerce sector, adding that he believes the company’s “omnichannel strategy with the additional kicker of gross payment volume expansion (esp. as the world reopens) should allow Wix to fully participate in the double tailwind of business going online, and commerce going digital.”  

Anticipating additional future upside, Mahaney said that about half of the company’s customers operate in fields which may still be restricted due to Covid-19. Upon a relaxing of pandemic related constraints, Wix could see a positive jolt to its balance sheet. 

TipRanks has calculated Mahaney as No. 62 out of over 7,000 financial analysts. Of his ratings, 74{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} have been successful, and they have returned him 57{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on average.  

Netflix  

As the hotly contested streaming wars continue, Netflix (NFLX) has been investing in innovations beyond its strong entertainment pipeline. The production and streaming service company has officially released several mobile games as it expands into an entirely new category of content. Doug Anmuth of JPMorgan stated that “NFLX remains a top pick” and that he expects the fourth quarter to bring success for the streaming giant. (See Netflix Hedge Fund Activity on TipRanks) 

Anmuth was enthusiastic “on shares based on continued strengthening of the 4Q content slate, greater distance from pandemic pull-forward, improving seasonality, & potential for greater traction in APAC, where NFLX has low penetration.”  

The analyst rated the stock a Buy, and decided on a price target of $750.  

In addition to the significant upcoming TV shows and movies set for the last quarter of this fiscal year, Anmuth noted that long-term upside can also be found in Netflix’s plans for share repurchases. The company is also benefitting from the “global proliferation of Internet-connected devices,” as consumer attention turns away from traditional cable and satellite TV options.  

Anmuth is confident that Netflix can continue penetrating high potential markets, such as China. Overall, NFLX’s content has been popular worldwide and a “virtuous circle” of subscriber and revenue growth is expected to carry the company to higher valuations.  

Out of over 7,000 financial analysts, TipRanks has calculated Anmuth to be No. 112. His stock picks have been correct 69{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the time, and have returned an average of 40.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.  

Square  

Despite persisting inflationary fears, consumer spending has continued to climb. This is good news for Square (SQ), which generates revenues from transactions through its subscription-based payment hardware and software platforms. The company has made inroads toward several other strategic business endeavors, including expansion into full-fledged fintech services, cryptocurrency initiatives, and high-profile acquisitions. (See Square Website Traffic on TipRanks) 

Ivan Feinseth of Tigress Financial Partners detailed his bullish hypothesis on the company, writing that “SQ’s innovative capabilities will continue to drive the introduction of new products that take it beyond the payment and continue to drive growth, increasing Return on Capital, greater Economic Profit, and accelerating shareholder value creation.” 

Feinseth rated the stock a Buy, and raised his price target to $310 from $295.  

The analyst explained that Square has now acquired “buy now, pay later” firm Afterpay, as well as Credit Karma Tax in its effort to transition into a more well-rounded fintech company. The firm has been moving its banking services in-house, which is anticipated by Feinseth to increase its overall margins. Moreover, these acquisitions are expected to provide for increased integration of sellers and consumers across its ecosystem of platforms.  

The broad consumer shift toward contactless payment preferences has supported Square as of late, allowing the company to report strong third-quarter revenues. 

Feinseth stands at No. 52 out of more than 7,000 analysts in TipRanks’ database. He retains a success rate of 76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on his stock picks, and has returned an average of 38.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on each one over the prior two year period.  

Nvidia  

The semiconductor shortage is throwing sawdust into the engines of several industries, notably the automotive and smartphone manufacturing sectors. Meanwhile, some of the firms which design the chips are seeing impressive earnings and revenue amid the heightened demand. Nvidia (NVDA) recently printed yet another quarter of exceeded estimates, and analysts do not expect it to slow down any time soon. (See Nvidia Earnings Date & Reports on TipRanks) 

One of those bullish professionals is Christopher Rolland of Susquehanna Financial Group, who wrote that NVDA saw a record quarter across at least two of its main end-markets: data center and gaming. He added that the growth in the former is expected to continue performing well into the fourth quarter. According to the analyst, “Data Center was driven by hyperscalers for cloud computing, natural language processing, and deep recommender models, while Enterprise continues to be driven by vertical industries.” 

Rolland rated the stock a Buy, and provided a price target of $360.  

The tech company is also experiencing high demand for its networking solutions, with “higher momentum for their ethernet [network interface controllers], Quantum 2 switches, and Bluefield 3 [data processing units].”  

While the firm’s gaming segment remained productive this past quarter, Rolland said that the industry’s growth itself is difficult to predict. However, the company’s graphics processing unit, or GPU, inventory could still benefit from an increase in its supply. This instance is anticipated by Rolland as a potential future tailwind come 2022. 

Rolland remained confident in NVDA, and views it as a “pure and levered way to invest in the future prospects of the GPU, a device we believe is undergoing a renaissance.” 

TipRanks rates over 7,000 analysts, and currently places Rolland at No. 6. His stock ratings have been successful 87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the time, and have returned an average of 56.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} each.  

 

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How to Become a CFA

How to Become a CFA

The chartered financial analyst, or CFA, designation is often viewed as the gold standard in investment management. For financial industry, Home Garden USA.

The chartered financial analyst, or CFA, designation is often viewed as the gold standard in investment management.

For financial industry professionals whose aspirations lie in analysis, you can’t do much better than the chartered financial analyst marks, which demonstrate knowledge of investments, portfolio management and other aspects of wealth planning. “It is slowly becoming the ‘college degree’ of investment management,” says Bryan Lee, a CFA who is the chief investment officer at Blue Zone Wealth Advisors, “meaning, for some companies, it is a must-have to even attempt to work there.”

Here’s what to know about earning the CFA as a financial certification — and what it’s like to work as a CFA.

[SUBSCRIBE: Get the weekly U.S. News newsletter for financial advisors. ]

What Is a Chartered Financial Analyst?

A chartered financial analyst is a financial professional who’s earned professional marks denoting expertise in investment management. Given by the CFA Institute, the chartered financial analyst program teaches the fundamentals of investment management, from asset valuation and analysis to portfolio management and wealth planning.

Investment management is an evolving ecosystem affected by valuation, politics, economics, accounting, ethics and behavioral science, says Taylor Royal, a CFA and partner and financial representative with Royal Wealth Partners, a Northwestern Mutual private client group. “The CFA charter is the differentiator in finance and dives deep into each of these topics.”

[READ: MBA or CFA: Which Is Better for Financial Advisors?]

How to Become a CFA

To become a CFA, you’ll need to pass a three-part sequential CFA exam that includes multiple-choice and essay questions. It is considered one of the hardest professional exams in the industry. The average pass rate on each part ranges from 42{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 54{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. From 1963 to 2021, only 45{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of applicants passed all three exam parts. Candidates report studying for more than 320 hours on average in preparation for each exam.

Depending on when you register, the CFA program can cost between $700 and $1,000 — or more if you need to reschedule your exam date.

You must also complete at least 4,000 hours of relevant work experience over a minimum of 36 months. To be relevant, that work must be “directly related to the investment decision-making process producing a work product that informs or adds value to that process,” according to the CFA website. You can complete this work experience before, during or after passing the exam. But applicants won’t be able to use the CFA designation until they’ve met all these requirements, which also include submitting two to three professional references who can comment on their work experience and professional character.

“The CFA program was a major commitment of time, money and brainpower,” Royal says. “I began studying for each level at least six months in advance of each test and spent countless nights and weekends preparing for each exam.”

Be prepared to turn down a lot of social events while you’re preparing for the CFA exam. “I always tell people there is only one way to approach the program, and that is to go all in,” Lee says. “I have seen past co-workers take multiple years to pass different levels, and it can really be draining.”

He chose to tackle the program as quickly as possible, so while he felt like he was making a lot of sacrifices at the time, he was able to complete the program efficiently by passing each exam on his first attempt. “Looking back, I think that was key to keep my motivation high and remain disciplined and focused,” he says.

He also recommends sticking to a study schedule and taking as many practice exams as possible. But don’t forget to get enough sleep and exercise, so you don’t get burned out. “Understand why you are going through the process and make sure you use that as motivation to get through the difficult and frustrating weekends that you are studying all day while your friends are out having fun,” he says.

To help him get through the exam, Jim Grefenstette, a CFA with DJM Financial, a Northwestern Mutual private client group, joined a study group. The group members met regularly to review topics and hold each other accountable. Grefenstette says having that study group was critical to his progress.

“For any aspiring CFAs, my advice is to come at the work with passion and know that the designation can open doors to a wide variety of successful and fun careers in finance,” he says.

[READ: What to Know About Working as a Freelance Financial Planner.]

What Do CFAs Do for Work?

CFAs hold a variety of careers across all sectors of the financial industry, from asset management and private wealth management to insurance and commercial or investment banking.

You’ll also find CFAs in emerging sectors like financial technology. CFAs typically work as research analysts or investment consultants or strategists. They may work in portfolio management or risk analysis and management. CFA charterholder portfolio managers reported a base salary of $126,000 in 2019 and a total compensation of $177,000, according to the CFA Institute.

As a CFA, Royal advises sophisticated professionals who have earned their wealth in technology or as business entrepreneurs and managers. He says the CFA credential has helped him demonstrate his ability to meet his clients’ unique financial needs while showing his commitment to higher ethical standards.

Grefenstette chose to get his CFA while working as an analyst for an equity mutual fund. “I wanted to both improve my analytical skills, so I could do my job better, and be able to communicate my qualifications to my fund shareholders, so that they could have more confidence in our fund’s investment process,” he says.

He says he never could have progressed in the field without the skills he developed and honed through the CFA program. “An analyst, to a large extent, must make decisions or judgments based on incomplete information most of the time, as the variables in finance are often as qualitative as they are quantitative,” he says. “I think that aspect makes my job fun every day.”

The CFA charter can also be beneficial to professionals who aspire to work in a more analytical role. It allows them to be heard in the room and demonstrate that they have the required background and drive to advance within the company, Lee says.

“Having a CFA opens the door to more opportunities and allows for growth in your career,” he says. “If your company doesn’t value the designation, it can help you to find somewhere else that will — and will compensate you for your hard work completing the program.”

More from U.S. News

6 Pros and Cons of Choosing a Fee-Only Financial Advisor

14 Things to Know Before Becoming a Financial Advisor

8 Ways Financial Advisors Connect With Millennial Investors

How to Become a CFA originally appeared on usnews.com

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Dow slides but tech stocks outperform as Europe’s COVID struggles rattle markets

Stocks traded mixed on Friday, as growing concerns over nationwide COVID-19 lockdowns in Europe raised fears about new restrictions beyond the continent.

The Dow slid 200 points, or 0.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, while the S&P 500 rose 0.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, but the Nasdaq composite added 0.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, bolstered by rallying technology shares. 

Markets were unsettled after the Austrian government announced a full lockdown starting on Monday, in response to cases of COVID-19 surging in Europe. The lockdown will include both those vaccinated and unvaccinated, it will last for 10 days minimum, but could be extended for 10 days further.

“The news is hitting European markets hard this morning as fears mount that the virus and restrictions will spread across the continent again,” said Jim Reid, chief economist at Deutsche Bank, adding that “the curveball might be the U.S.” given lower rates of vaccination domestically than in Europe.

“So although all the headlines are in Europe at the moment, will the U.S. be more vulnerable than many European countries over the course of the full winter? Recent history suggests the U.S. have a higher bar for economic restrictions related to covid but it also has a lower vaccination rate than their European peers,” he added.

The Nasdaq was boosted by a jump in stocks associated with the “stay-at-home” trade that characterized much of 2020. Treasury yields, which have jumped in response to rising inflation fears, retreated early Friday as investors flocked to safe-haven assets. Brent crude (CL=F) sank by over 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, reflecting jitters that lockdowns will curb energy demand.

Meanwhile, shares of air carriers Delta Air Lines, United Airlines and American Airlines, and cruiseliners Carnival Corp and Norwegian Cruise Line fell between 1.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 2.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. 

And with the holiday season approaching and cold weather driving more people to meet indoors, public health officials are hoping to mitigate another COVID wave of cases this winter. The FDA on Friday authorized boosters of Pfizer/BioNTech and Moderna COVID-19 vaccines for all adults. 

The U.S House of Representatives on early Friday passed President Joe Biden’s $1.75 trillion bill, however the legislation will be sent to the Senate where negotiations will continue. The bill lays out the Administration’s plans on education, healthcare and the climate.

Also in focus for the markets is Biden’s Federal Reserve chair nomination. Biden told reporters on Tuesday to expect the announcement of a nominee for Fed chair in “the next four days.” The White House has not indicated which way it is leaning, but market participants see two leading options: the reappointment of current chair Jerome Powell, or the elevation of Fed Governor Lael Brainard.

“The market so far is believing that it will be Powell again, but any sort of a change would mean that they want to hear a reiteration of the monetary policy and forward expectations,” Sonali Pier, Pimco’s Managing Director and Portfolio Manager, told Yahoo Finance Live on Thursday.

“[That means] tapering, being at a pace of about $10 billion in treasuries, $5 billion in agency MBS, then thereafter seeing rate hikes but not a significant shift to be more hawkish,” Pier added.

With earnings season ongoing, Foot locker (FL) shares lost ground Friday, even after the athletic shoe and apparel retailer said it expects global supply-chain issues to persist through this quarter. Intuit (INTU) shares soared by over 12{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} after the financial-software company’s top and bottom lines both beat analysts’ expectations, and hiked its full-year revenue guidance for 2021 to $1 billion.

12:53 p.m. ET: The Dow Slides, Tech Outperforms

Here’s where markets were trading midday on Friday:

  • S&P 500 (^GSPC): +8.730 (+0.18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,714.09

  • Dow (^DJI): -318.12 (-0.39{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 35,732.83

  • Nasdaq (^IXIC): +109.71 (+0.67{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,101.90

  • Crude (CL=F): -$3.01 (-3.81{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $76.00 a barrel

  • Gold (GC=F): -$12.50 (-0.67{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,848.90 per ounce

  • 10-year Treasury (^TNX): -0.4bps to yield 1.543{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

9:30 a.m. ET: Stocks mixed, tech leads Nasdaq higher

Here’s where markets were trading shortly after market open on Friday:

  • S&P 500 (^GSPC): -6.33 (-0.13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,698.21

  • Dow (^DJI): -214.78 (-0.60{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 35,656.17

  • Nasdaq (^IXIC): +39.95 (+0.28{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16038.10

  • Crude (CL=F): -$1.51 (-1.91{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $77.50 a barrel

  • Gold (GC=F): -$4.20 (-0.23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,857.20 per ounce

  • 10-year Treasury (^TNX): unchanged to yield 1.6040{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

7:30 a.m. ET Friday: Stock futures poised for mixed start

Here’s where markets were trading Friday morning:

  • S&P 500 futures (ES=F): -11.75 points (+0.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,689.75

  • Dow futures (YM=F): -194 points (-0.54{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,619.00

  • Nasdaq futures (NQ=F): +54.75 points (+0.33{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,536.00

  • Crude (CL=F): -$2.65 (-3.35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $76.36 a barrel

  • Gold (GC=F): +$1.90 (+0.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,863.30 per ounce

  • 10-year Treasury (^TNX): -0.5 bps to yield 1.529{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

—

6:28 p.m. ET Thursday: Stock futures open higher

Here’s where markets were trading Thursday evening:

  • S&P 500 futures (ES=F): +0.5 points (+0.11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 4,706.50

  • Dow futures (YM=F): and +33 points (+0.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), to 35,844.00

Nasdaq futures (NQ=F): +22 points (+0.13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 16,503.50

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

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Billionaire Ray Dalio Picks Up These 3 ‘Strong Buy’ Stocks

We had some serious economic news this month, when October’s inflation rate came in at 6.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annualized. It was the sixth consecutive month +5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} year-over-year inflation gains – and the highest inflation rate seen in the US since 1990.

Billionaire Ray Dalio, founder of Bridgewater Associates, reminds investors that the worst asset to hold in this environment is cash.

“Some people make the mistake of thinking that they are getting richer because they are seeing their assets go up in price without seeing how their buying power is being eroded. The ones most hurt are those who have their money in cash,” Dalio noted.

Dalio didn’t become as successful as he is by letting inflation degrade his wealth. Aside from keeping out of cash, he also targets his investments. A savvy investor can get a good handle of equities that show the strongest prospect of guarding value by following Dalio’s purchases now.

Looking into Bridgewater’s basket of stocks, we’ve chosen three of the fund’s new holdings that TipRanks reveals as “strong buys” and offer healthy upside potential. Let’s take a closer look and see what Wall Street analysts have to say.

Global Payments (GPN)

We’ll start in the online payment processing sector, with Global Payments. This company is one of the main competitors to the better-known PayPal, and handles over 50 billion transactions annually for more than 3.5 million customers in over 100 countries. Global Payments operates mainly on the seller side of the transactions, offering its services to merchants and vendors. Services include credit and debit card processing and data analytics.

Global Payments shares have been falling since the spring; the stock peaked above $200 in April, but is down 39{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} since then. At the same time, earnings and revenues in the Q2 and Q3 have shown sequential gains – and management reported the Q3 results as a company record. EPS came in at $2.18 per share, up 27{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} yoy.

However, despite the sound results, the company issued full-year 2021 revenue guidance that fell shy of analyst forecasts. Specifically, the company guided toward $7.71 billion to $7.73 billion, just under the $7.74 billion that Wall Street had expected.

During the third quarter, Global Payments completed its $500 million acquisition of SaaS company MineralTree, a move that will give GPN a foot into the B2B payment market. The MineralTree move was only one that GPN took during September to enhance its footprint. The company also completed an agreement with the UK financial service group Virgin Money to enable a connected payment offering for Virgin Money’s customers. Moreover, GPN was chosen as the official provider of commerce technology at Mercedes-Benz Stadium, the home field of the NFL’s Atlanta Falcons.

Keeping all of this in mind, we can look at Dalio’s purchase of GPN. He’s started a new position in this stock during Q3, totaling 12,021 shares that are now valued at $1.57 million.

This action will not be surprising to Cowen’s 5-star analyst George Mihalos, who highlights several reasons to back the stock.

“GPN has gone from trading at an average ~2x premium to the SPX over the past 4 years (Acquirer Dislocation Opportunity) to a 6x discount presently, despite what we deem as a very achievable long-term outlook (low double-digit organic revenue growth, high-teens to low 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} adj. EPS growth) and hardly a deceleration from pre-pandemic levels. The price action across the sector and to a much lesser extent for the networks, reflects a perception of imminent disintermediation from newer entrants and payment methods,” Mihalos opined.

To this end, Mihalos gives GPN an Outperform (i.e. Buy) rating, and his $228 price target implies room for ~76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} one-year upside potential. (To watch Mihalos’ track record, click here)

Overall, it’s clear that Wall Street is in broad agreement with Mihalos’ outlook. The stock has 18 reviews, which include 15 Buys and only 3 Holds, for a Strong Buy consensus rating. Shares are priced at $129.69 and the $200.89 average target suggests ~55{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} upside in the next 12 months. (See GPN stock analysis)

Levi Strauss & Company (LEVI)

We’ve talked a lot about inflation in recent weeks, mostly because the country appears to be hitting a period of inflationary pain that hasn’t been felt since the Carter Administration. But some companies are proving to be mostly immune. Levi Strauss, best known for its blue jeans, is one. A look at the company’s quarterly report will provide some illumination.

Levi Strauss has reported 5 consecutive quarters of positive EPS – a strong recovering from the pandemic-induced negative result in 2Q20. The company’s 48-cent EPS result in 3Q21 was the best in over 2 years. Revenue also delivered; the company reported a top line of $1.5 billion, the best result since 1Q20. Both the revenue and earnings beat Wall Street’s expectations, revenue by a 1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} squeaker of a margin, but EPS by a much wider 29{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Management was upbeat, and justly so. The company’s performance in 3Q21 was comparable to, or slightly better than, pre-pandemic 2019 levels. The turnaround was driven in part by the reopening of schools, and a resumption of back-to-school shopping.

So we shouldn’t be surprised, given the company’s strong position, that Dalio has chosen Levis for a new position. The billionaire investor bought a total of 135,430 shares in the jeans company, stake that is now valued at $3.68 million.

Evercore analyst Omar Saad notes another important point – that Levi Strauss has achieved this performance despite the supply chain crunch that has been making unwelcome headlines.

“Fears that supply chain bottlenecks and cost inflation would cause Levi’s to miss sales and earnings expectations and lower guidance (a la NKE and BBBY) proved to be unfounded as the denim juggernaut grew sales 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} (vs. cons +1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), delivered a multi-decade high 14.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} EBIT margin, and raised guidance… Although Levi’s is not immune to broader supply chain challenges (was a 70-bp drag on sales in 3Q and could be 2-3x that in 4Q), the combination of its diversified manufacturing base and newfound pricing power is more than offsetting the inflationary drags,” Saad wrote.

In line with his positive outlook, Saad rates the stock an Outperform (i.e. Buy) and sets a $40 price target that indicates confidence in ~46{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} upside for the year ahead. (To watch Saad’s track record, click here)

Overall, the Strong Buy consensus rating here is unanimous, based on 5 recent positive reviews. The shares are priced at $27.42 and their $37.25 average target implies a one-year upside potential of ~36{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from that level. (See LEVI stock analysis)

Lithia Motors (LAD)

We’ll wrap up with a shift in focus, to the automotive industry. The double whammy of inflation and supply chain problems have been putting strong upward pressure on automotive prices. Manufacturers are having trouble meeting demand due to shortages of semiconductor chips, dealers are having trouble filling their lots, due to lower production and delayed deliveries, and today’s used car prices are starting to look like new car sticker prices from 2015.

That’s the background to remember when we look at Lithia Motors, the third largest automotive retailer group in the US. The Oregon-based company sells both new and used vehicles through a network of locations in the US and Canada. Lithia’s network includes 264 dealerships selling 34 automotive brands. Vehicles in stock include 34,793 used vehicles and 18,485 new vehicles.

The immediate effect of inflation on Lithia has been to push up revenues. Automobile prices are up – way up. Used cars have seen a 45{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} increase, while new cars are averaging $42,000. This can be seen in Lithia’s Q3 revenue, which grew 70{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} yoy to reach $6.2 billion. EPS came in at $10.11, up 47{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} yoy. Counting cash and available credit, the company claimed $1.7 billion in available liquidity at the end of the quarter. Earnings and revenue beat the Wall Street estimates; EPS by 14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} margin and revenue by a narrower 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Ray Dalio was suitably impressed, and opened up his position on this stock with 7,537 shares. Due to the high share price, these shares are now worth $2.45 million.

Among the bulls is Guggenheim’s 5-star analyst Ali Faghri, who rates LAD a Buy along with a $542 price target. This figure implies share appreciation in the next 12 months of ~64{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. (To watch Faghri’s track record, click here)

Backing his stance, Faghri noted, “LAD reported 3Q results well above expectations in a tough environment amid significant new vehicle inventory shortages. We came away even more bullish on the outlook and reiterate LAD as our Best Idea… LAD’s outperformance continues to highlight its sourcing advantages and that of its franchise dealer peers, given their access to the trade-in and off-lease channels which gives the group a structural advantage compared to standalone used car dealers which rely heavily on auction.”

Once again, we’re looking at a stock with a unanimous Strong Buy consensus, supported by 4 positive stock reviews. The average price target of $505.75 implies a one-year upside of ~53{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from the current trading price of $329.63. (See LAD stock analysis)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.