US - Market Strategy 03 (Jan 24 - Dec 26)

[winston]

The Growth Sector Is Overstretched

by Jeff Clark

The S&P 500 is up 17% so far this year. The Nasdaq 100 is up 24%.

The Technology Select Sector ETF (XLK) has gained 22%. The VanEck Semiconductor ETF (SMH) is up an average of more than 50%.

Meanwhile, the Russell 2000 (IWM) is just barely positive on the year. The iShares U.S. Transportation ETF (IYT) is flatlining.

The proverbial rubber band for the growth sector is overstretched to the upside. It’s vulnerable to a decline. And, the value stock rubber band is overstretched to the downside. It’s set up for a rally.

Source: Jeff Clark Trader

https://tradesoftheday.com/2024/07/15/t ... stretched/

[winston]

A Massive Opportunity Could Soon Be Here

by Lucas Downey

It’s important to understand that these rotational quakes tend to happen during trying macro times like 2000, 2001, 2008, and 2020. The fact that we’re seeing it today only reiterates the changing macro climate.

The main takeaway here is that you need to consider the possibility of changing market leadership in the months ahead. Beaten-down areas, choked by high rates, can finally start to thrive again. And that’s a great thing!

Areas that come to mind are homebuilders, REITs, financials, and select large-item discretionary plays like furniture, cars, and home repairs.

We could be on the cusp of a revival in the hated small-cap space… and you don’t want to miss it.

Source: TradeSmith

https://tradesoftheday.com/2024/07/17/a ... n-be-here/

[winston]

Here are 4 developments that bear watching in this 2Q24 earnings season

High bar for equities sets the stage for profit-taking on earnings disappointments, given
1) market expectation for 9.3% y/y earnings growth is at its highest since 1Q22, and
(2) S&P 500’s YTD return of 18.8% is a reflection of robust investor optimism

Ongoing broadening of equity market rally should continue, as markets pay more attention to Fed rate cut expectations than the outcome of the US presidential elections

At the S&P 500 sector levels, we think healthcare can surprise positively while all eyes are on YTD outperformer technology to deliver

Healthcare: YTD underperformance and most attractive 12-mth forward PEG ratio may appeal to investors searching for growth at a reasonable price (e.g., Pfizer, Merck)

Technology: Talks of further restrictions cloud over the outlook for lofty AI-fuelled earnings, with equipment makers (ASML, Tokyo Electron, Applied Materials) likely to bear a bigger brunt

We are also watching for potential signs of slowdown among US consumers, with consumers noted to turning more value-conscious across different income groups in PepsiCo latest results

Staples like Walmart and Costco could benefit from a pullback in discretionary F&B spending (McDonald’s, Yum! Brands, and Starbucks)

Source: DBS

[winston]

UBS Raises End-2024 S&P 500 Target to 5,900, Expects 2 Fed Rate Cuts This Yr

UBS released a report, raising its target for S&P 500 to 5,900 by the end of this year and 6,200 by the middle of next year, reflecting solid corporate earnings growth, slowing inflation, expectations of US Fed interest rate cuts, and surging AI investment.

UBS said the market's P/E ratio is high but still reasonable in a favourable macro environment, and forecasted S&P 500 constituent earnings to grow by 11% to US$250 per share this year and 8% to US$270 per share next year.

Related News: Trump Says He Will Let Powell Finish Fed Chair Tenure, but Warns No Rate Cut by Nov

UBS also said it expected the Fed's rate cuts to be seen as having a positive impact on the stock market, and currently predicted two rate cuts this year, with the first coming in September.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[behappyalways]

Is the election sure? "Trump concept stocks" soar and Bitcoin hits a two-week high

勝選在握? 「川普概念股」狂飆 比特幣衝兩周新高｜方念華｜FOCUS全球新聞 20240716 ‪@tvbsfocus‬

https://m.youtube.com/watch?v=F1q6Ga0rWhg

[winston]

Time to Buy These Stocks

by Robert Ross

Goldman Sachs says 31% of Russell 2000 stocks had negative net income in the latest quarter compared to 0% for the S&P 500.

Since small caps are far more dependent on borrowing money to fund operations, lower interest rates will be a massive boon for small cap earnings as interest expenses fall.

So, while mega cap tech stocks are getting all the investor attention right now, I expect the pendulum to swing back to small caps over the next six months.

Source: Total Wealth

https://dailytradealert.com/2024/07/19/ ... e_vignette

[winston]

HIGHS AND LOWS

NEW HIGHS OF NOTE LAST WEEK

Lockheed Martin (LMT)... "offense" contractor
Royal Bank of Canada (RY)... financial services
Barclays (BCS)... financial services
Blackstone (BX)... asset management
Aflac (AFL)... insurance
Fair Isaac (FICO)... credit-score data analytics
Welltower (WELL)... health care REIT
PulteGroup (PHM)... homebuilder
NVR (NVR)... homebuilder
Coca-Cola (KO)... soft drinks
Walmart (WMT)... "World Dominator" of discount retail
Kimberly-Clark (KMB)... household goods
Cintas (CTAS)... uniforms
Philip Morris (PM)... cigarettes and alternatives
Altria (MO)... cigarettes and alternatives
Waste Management (WM)... trash and recycling
Kinder Morgan (KMI)... oil and gas
Targa Resources (TRGP)... natural gas
Williams Companies (WMB)... natural gas

NEW LOWS OF NOTE LAST WEEK

Five Below (FIVE)... discount retail
Helen of Troy (HELE)... consumer goods
Estée Lauder (EL)... cosmetics
Bumble (BMBL)... dating app
Las Vegas Sands (LVS)... casinos and resorts

Source: Daily Wealth

[winston]

Ultra-Rare Bullish Signal Says Small Caps Can Rip 40% Higher

by Lucas Downey

Russell 2000 Surges to Highest Level in 2.5 Years

With smaller companies set to thrive in the months and years ahead, there’s going to be lots of new leadership to focus on.

That means new areas of focus like Financials, Industrials, Discretionary and REITs, have to be on your watchlist.

Source: TradeSmith

https://tradesoftheday.com/2024/07/26/u ... e_vignette

[behappyalways]

"Little Cash On The Sidelines" May Indicate Firepower To Sustain Equity Rally Diminishes
https://www.zerohedge.com/markets/littl ... diminishes

[winston]

HIGHS AND LOWS

AbbVie (ABBV)... pharmaceuticals
Thermo Fisher Scientific (TMO)... life sciences
Arthur J. Gallagher (AJG)... insurance
Hartford Financial Services (HIG)... insurance
TransUnion (TRU)... credit reports
Infosys (INFY)... IT consulting
Garmin (GRMN)... GPS technology
Gildan Activewear (GIL)... apparel
Unilever (UL)... household goods
Coca-Cola (KO)... soft drinks
British American Tobacco (BTI)... nicotine products
CBRE Group... real estate services
D.R. Horton (DHI)... homebuilder
KB Home (KBH)... homebuilder
3M (MMM)... manufacturing
United Rentals (URI)... equipment rentals
CorVel (CRVL)... risk-management solutions
Lockheed Martin (LMT)... aerospace and defense
Heico (HEI)... aerospace and defense
Seadrill (SDRL)... offshore drilling


NEW LOWS OF NOTE LAST WEEK

Las Vegas Sands (LVS)... casinos and resorts
Wynn Resorts (WYNN)... casinos and resorts
Five Below (FIVE)... discount retail
Ulta Beauty (ULTA)... cosmetics
Stellantis (STLA)... automaker
DexCom (DXCM)... medical devices


Source: Daily Wealth