Ticker Take with Jon Erlichman
A weekly newsletter about investing.
Another week of wins for the bulls. The S&P 500 and Nasdaq Composite rallied to set new records after data showed U.S. hiring rebounded in November. The jobs report suggested the labor market is in decent shape, but not strong enough to keep the Federal Reserve from lowering interest rates.
Both the Nasdaq and S&P 500 enjoyed weekly gains, bringing their win streak to three straight weeks. Meanwhile, Bitcoin crossed $100,000 for the first time.
Canada’s Stock Market Surges Despite Tariff Troubles
Canadian stocks have shown resilience in the face of Trump’s tariff threats.
Despite worries about how the President-Elect’s policies will impact Canada’s economy, the TSX has been enjoying a record run. Last month, it topped 25,000 for the first time. And, it has kept pace with the S&P 500 since election day.
Why? Well, some of the standout performers are not so much makers of goods, but instead, providers of services. Stocks such as Shopify, Celestica and CAE. And it’s less clear how those kinds of businesses would be impacted by tariffs on goods.
Note: all charts above and below are provided by my friend MarketLab. Be sure to check out his weekly review of the markets at www.marketlabnewsletter.com
Which stocks could be next to join the S&P 500?
Apollo Global Management and Workday have been added to the S&P 500 index in the latest quarterly weighting change.
The two companies will replace Qorvo Inc. and Amentum Holdings, with the changes are set to go into effect prior to the open of trading on December 23rd.
Sometimes spots open up in the index when other companies no longer meet inclusion requirements or, for example, are acquired and no longer have a public listing.
Which stocks could be next to join the most exclusive club in the stock market?
Kudos to strategists at Bloomberg who predicted that both Apollo and Workday would join the S&P 500.
Both were on a Bloomberg list, based on a few factors including size (having a fairly large market cap and profits).
Other stocks Bloomberg identified for future inclusion? AppLovin, Coinbase, Trade Desk, Interactive Brokers, Lennox International, EMCOR, Williams-Sonoma, and Watsco.
E-Commerce Sales Set To Top Physical Sales?
How much holiday shopping are you doing online? If it’s more than last year, you’re not alone. According to Bloomberg, e-commerce sales in the US are on track to reach $2.9 trillion by the end of this decade.
That’d be up from $1.6 trillion last year. And it would make digital sales bigger than those at physical stores. The analysis finds that AI… is helping to improve search and checkout options for shopping on your phone. Meanwhile, social media is increasingly becoming a gathering spot for commerce.
Which companies will benefit the most from this trend? Bloomberg says Amazon continues to top the list, although Walmart has made big strides online.
Digital natives eBay, etsy, Wayfair, chewy and Shopify also get shout-outs.
Cyclical Stocks To Fuel Fresh Highs?
Will U.S. stocks keep climbing in 2025? Strategists at Bank of America think so. They believe the S&P 500 could rise another 10% in the new year, although they’re betting less on tech and more on the old economy.
B of A says in its research it believes trends such as re-shoring and prepping the power grid for our AI future will benefit companies tied to commodities, construction and infrastructure.
It’s worth noting strategists at Morgan Stanley have also issued a bullish call on cyclical stocks, particularly in the financial sector.
And research from Goldman Sachs found that hedge funds have been loading up on cyclical names late this year.
Note: all charts above and below are provided by my friend MarketLab. Be sure to check out his weekly review of the markets at www.marketlabnewsletter.com
Gold Set To Shine Again in 2025?
It’s been a good year for gold. And some big firms on Wall Street see more gains ahead. Commodity researchers at JP Morgan expect the price of bullion to reach $3,000 an ounce in 2025. Strategists at Bank of America made a similar call. The analysts see two positive sides to the gold coin. On the one hand — if trade tensions and tariffs lead to a rebound in inflation, they see gold as an inflationary hedge.
Meanwhile, if interest rates come down and the U.S. dollar weakens, that could also be good for gold — as it often moves in the opposite direction of the currency.
Time To Take A Bite Out of Apple?
Could Apple be a top stock pick for 2025? One Wall Street firm thinks so. Researchers at Evercore ISI are recommending Apple to investors arguing the tech giant is set to benefit from its artificial intelligence efforts. Integrating AI into its phones has been a big priority this year. And while it hasn’t turbo charged sales, the analysts say AI features will help iPhone growth over the long term.
Meanwhile, developers are incorporating AI into their iPhone apps and Apple could benefit from that, since it generates revenue from the app economy. Evercore believes Apple should trade at around $250 per share. That’s not the highest forecast on Wall Street, but it’s higher than the average target among the analysts tracked by Bloomberg.
As for other tech stocks Evercore is recommending for 2025? They include IBM, Arista Networks, Amphenol and Vertiv Holdings.
6 boring stocks that could yield big returns
In the stock market, boring can be beautiful. And in our latest YouTube video, we looked at the stocks for 6 businesses that aren’t exactly exciting, but have been huge stock performers in the past decade. AND... as their company profits continue to grow, Wall Street analysts expect their stock prices to keep climbing. Check it out!
Analyst Picks of the Week
Birkenstock
HSBC’s analyst is upbeat about Birkenstock shares and believes they could reach $60. The analysts say worries about a slowdown in the company’s direct-to-consumer business are overblown. They also see growth potential in Asia, where Birkenstock is building its business off a lower base.
Credo Technology
Bank of America analysts “double upgraded” Credo to Buy from Underperform and see the stock reaching $80. Credo has notable customers, such as Amazon Web Services. As sales continue to grow, BofA believes Credo will see better earnings growth.
NextEra Energy Partners
This stock received a so-called “double upgrade” from Morgan Stanley, which believes $22 represents fair value for the shares. Morgan Stanley was surprised by the stock’s weakness this year and believes demand for renewables over the longer term is much stronger than what is currently appreciated by the market.
Tesla
Analysts at Roth MKM upgraded Tesla to Buy, with a price target of $380. Now, mind you, Tesla’s huge move leaves the stock above that level already. But Roth previously had an $85 target on Tesla. If you subscribe to my YouTube channel , you may have seen my video about whether or not Tesla is the most misunderstood stock because the long term roadmap positions Tesla as an AI company. Roth in its note, now seems to be buying into that idea.
