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Large-Cap Stocks to Watch Before the End of 2021

Many retail companies perform their best in Q4 as shoppers are gearing up for the busy season.
The post Large-Cap Stocks to Watch Before the End of 2021 appeared first on Investment U.

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It’s almost winter, and you know what that means for markets – holiday season! Many retail companies perform their best in Q4 as shoppers are gearing up for the busy season. But, this holiday season could look different than past ones. That’s why it’s critical to know the top large-cap stocks to watch in order to protect your money.

Large-cap stocks are generally those that have a market cap over $10 billion. Also, these are companies that are well established and often have more reliable revenue streams.

5 Large-Cap Stocks to Watch

A major theme developing is the FEDs indication that rising interest rates could be on the horizon. And when this happens, smaller growth companies will be the ones most heavily impacted.

Investing in more seasoned companies, like large-cap stocks, can help protect your portfolio. These businesses are better positioned for economic changes.

With this in mind, let’s take a deeper look into the top large-cap stocks to watch that are ready to weather the storm.

#5 Netflix (NASDAQ: NFLX)

  • Market Cap: 291.83B
  • P/E: 59.33
  • EPS (TTM): 11.10
  • YOY Revenue Growth: 17%

With its latest hit, Squid Games, a stock that’s on everyone’s mind right now is Netflix. The series is the latest to go viral and grab the world’s attention.

With that being said, 2020 accelerated Netflix’s business, prompting more people to sign up for the popular streaming service. Now that the Covid vaccine has rolled out and people feel safer returning to their normal activities, engagement has fallen slightly.

However, Netflix is still growing and adding memberships. They added another 1.5 million paid members in the second quarter.

Netflix stock is up 27% YTD, after an incredible run in 2020. With a well-known brand name, ability to produce hits, and improving margins, Netflix is a top large-cap stock to watch in Q4.

Additionally, Netflix is now looking to get into gaming, an industry looking to take in over $300 billion by 2026.

#4 Walmart (NYSE: WMT)

  • Market Cap: 409.38B
  • P/E: 41.75
  • EPS (TTM): 3.55
  • YOY Revenue Growth: 2.4%

When mentioning the top large-cap stocks to watch, you can’t skip Walmart (NYSE: WMT). In addition to being the largest retailer in the world, it’s creeping into eCommerce.

Walmart’s e-commerce comp sales have grown for the past 12 quarters, staying above 3.9% growth in 2021. Although the pandemic may have deterred shoppers from shopping in-store, Walmart accelerated its digital efforts.

On top of this, supply chain issues are pushing prices of goods higher. When this happens, low-cost retailers like Walmart can see higher demand.

And if that isn’t enough, Walmart offers an attractive dividend yield of 1.48%. Lastly, Walmart stock has yet to reach it YTD high again, offering a solid buying point.

#3 Amazon (NASDAQ: AMZN)

  • Market Cap: 1.7T
  • P/E: 58.26
  • EPS (TTM): 57.38
  • YOY Revenue Growth: 27%

Speaking of eCommerce, Amazon (NASDAQ: AMZN) makes up over 40% of the market share. The pandemic also accelerated Amazon’s business. But, it wasn’t just retail sales. Its dominant cloud service AWS also boosted its sales.

As more people are online, companies need a place to store and transfer the extra data. In fact, some of the top large-cap stocks use AWS, including Netflix.

Throughout 2021, Amazon stock has been covered by many analysts, essentially all of them agree – it’s a buy.

And with shortages about to hit stores around the world, Amazon is in an excellent position to capture a fair share of shoppers this holiday season.

#2 Alphabet (NASDAQ: GOOG)

  • Market Cap: 1.9T
  • P/E: 29.79
  • EPS (TTM): 92.24
  • YOY Revenue Growth: 62%

Next on our list of large-cap stocks to watch, we have Google (NASDAQ: GOOG), an innovating machine. It’s participating in some of the highest growing industries, such as:

  • AI
  • Advertising
  • Smartphones
  • Cloud services
  • Self-driving tech
  • And quick form videos (YouTube)

Not to mention, search, a market that’s synonymous with the company (Google it). Google controls 92.5% of all searches globally. Think about that, of all searches IN THE WORLD, over 90% go through Google.

As companies are putting more focus on digital advertising, Google ads is becoming a gold mine. The segment alone grew 68% with revenue of $50.4 billion.

Google stock is a good buy for most types of markets. If people stay home, they are on the internet longer, and companies will spend more on ads.

Google stock is up 60% in the past year due to its strong performance and doesn’t look to be slowing down anytime soon. With a tight grip on the advertising market, Google looks like a top large-cap stock to watch going forward.

#1 Large-Cap Stock to Watch – Apple (NASDAQ: AAPL)

  • Market Cap: 2.47T
  • P/E: 29.20
  • EPS (TTM): 5.11
  • YOY Revenue Growth: 36%

Despite supply issues plaguing the industry, Apple (NASDAQ: AAPL) is firing on all cylinders. It just broke its third-quarter revenue record and looks to continue the momentum.

The forward-thinking company broke revenue records in all geographic segments. All of Apple’s categories saw an increase in demand – iPhone, Mac, iPad, Wearables, and Services.

Apple’s most significant advantage has been and will continue to be its brand power. Everyone knows Apple as the cool, innovative brand. And that’s what keeps consumers coming back every time they release a product. Apple stock is up 15.39% YTD.

Top Large-Cap Stocks to Watch Before Years End – What You Need to Know

Before the end of the year, check out these top large-cap stocks to help balance your account. These stocks are well established but still exceeding everyone’s expectations. That’s what it takes to continue growing a company.

Additionally, with several unknowns coming up – inflation, interest rates, and supply chain problems – the best way to play it safe is by investing in the top companies.

On top of this, employees demanding more wages could hurt small businesses more. The companies on this list should have no issues hiring, as they are some of the best in the world to work for. As a result, they can afford to pay more than a startup.

When the stock market drops, people flee to safer investments. And these are all set to continue expanding in their respective industries.

For more large-cap stocks to watch and other great opportunities, sign up for Liberty Through Wealth. This free e-letter will help you make smarter, more profitable investments. Join Now!

The post Large-Cap Stocks to Watch Before the End of 2021 appeared first on Investment U.

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Economics

FT-IGM US Macroeconomists Survey for December

The FT-IGM US Macroeconomists survey is out (it was conducted over the weekend). The results are summarized here, and an FT article here (gated). Here’s some of the results. For GDP, assuming Q4 is as predicted in the November Survey of Professional…

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The FT-IGM US Macroeconomists survey is out (it was conducted over the weekend). The results are summarized here, and an FT article here (gated). Here’s some of the results.

For GDP, assuming Q4 is as predicted in the November Survey of Professional Forecasters, we have the following picture.

Figure 1: GDP (black), potential GDP (gray), November Survey of Professional Forecasters (red), November SPF subtracting 1.5ppts in Q1, 05ppts in Q2 (blue), FT-IGM December survey (sky blue squares), all on log scale. FT-IGM GDP level assumes 2021Q4 growth rate equals SPF November forecast. NBER defined recession dates peak-to-trough shaded gray. Source: BEA 2021Q3 2nd release, Philadelphia Fed November SPF, FT-IGM December survey, and author’s calculations.

In the figure above, I’ve used the SPF forecast of 4.6% SAAR in 2021Q4; the Atlanta Fed’s nowcast as of yesterday (12/7) was 8.6% SAAR. A new nowcast comes out tomorrow.

Interestingly, q4/q4 median forecasted growth equals that implied by the Survey of Professional Forecasters November survey (which was taken nearly a month before news of the omicron variant came out).

The q4/q4 forecast distribution for 2022 is skewed, with the 90th percentile at 5% growth, the 10th percentile at 2.5%, and median at 3.5%. I show the corresponding implied levels of GDP (once again assuming 2021Q4 growth equals the SPF ).

Figure 2: GDP (black), November Survey of Professional Forecasters (red), FT-IGM December survey (sky blue squares), 90th percentile and 10th percentile implied levels (light blue +), my median forecast (green triangle), all on log scale. FT-IGM GDP level assumes 2021Q4 growth rate equals SPF November forecast. NBER defined recession dates peak-to-trough shaded gray. Source: BEA 2021Q3 2nd release, Philadelphia Fed November SPF, FT-IGM December survey, and author’s calculations.

On unemployment, the median forecast is for a deceleration in recovery,

Figure 3: Unemployment rate (black), November Survey of Professional Forecasters (red), FT-IGM December survey (sky blue square), 90th percentile and 10th percentile implied levels (light blue +), my median forecast (green triangle). NBER defined recession dates peak-to-trough shaded gray. Source: BEA 2021Q3 2nd release, Philadelphia Fed November SPF, FT-IGM December survey, and author’s calculations.

The survey respondents also think that the participation rate will take a long time to return to pre-pandemic levels.

Source: FT-IGM, December 2021 survey.

On inflation, the median is higher than the November SPF mean estimate for 2022 of 2.3% (and Goldman Sachs’ current estimate).

Source: FT-IGM, December 2021 survey.

The entire survey results are here.

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Government

Over 170 companies delisted from major U.S. stock exchanges in 12 months

  Over the years, United States-based exchanges have remained an attractive destination for most companies aiming to go public. With businesses jostling to join the trading platforms, the exchanges have also delisted a significant number of companies….

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Over the years, United States-based exchanges have remained an attractive destination for most companies aiming to go public. With businesses jostling to join the trading platforms, the exchanges have also delisted a significant number of companies.

According to data acquired by Finbold, a total of 179 companies have been delisted from the major United States exchanges between 2020 and 2021. In 2021, the number of companies on Nasdaq and the New York Stock Exchange (NYSE) stands at 6,000, dropping 2.89% from last year’s figure of 6,179. In 2019, the listed companies stood at 5,454.

NYSE recorded the highest delisting with companies on the platform, dropping 15.28% year-over-year from 2,873 to 2,434. Elsewhere, Nasdaq listed companies grew 7.86% from 3,306 to 3,566. Data on the number of listed companies on NASDAQ and NYSE is provided by The World Federation of Exchanges.

The delisting of the companies is potentially guided by basic factors such as violating listing regulations and failing to meet minimum financial standards like the inability to maintain a minimum share price, financial ratios, and sales levels. Additionally, some companies might opt for voluntary delisting motivated by the desire to trade on other exchanges.

Furthermore, the delisting on U.S. major exchanges might be due to the emergence of new alternative markets, especially in Asia. China and Hong Kong markets have become more appealing, with regulators making local listings more attractive. Over the years, exchanges in the region have strived to emerge as key players amid dominance by U.S. equity markets. As per a previous report, the U.S. controls 56% of the global stock market value.

A significant portion of the delisted companies also stems from the regulatory perspective pitting U.S. agencies and their Chinese counterparts. For instance, China Mobile Ltd, China Unicom, and China Telecom Corp announced their delisting from NYSE, citing investment restrictions dating from 2020.

Worth noting is that the delisting of firms was initiated due to strict measures put in place by the Trump administration. The current administration has left the regulations in place while proposing additional regulations. For instance, a recent regulation update by the Securities Exchange Commission requiring US-listed Chinese companies to disclose their ownership structure has led to the exit of cab-hailing company Didi from the NYSE.

Impact of pandemic on the listing of companies

The delisting also comes in the wake of the Covid-19 pandemic that resulted in economic turmoil. With the shutdown of the economy, most companies entered into bankruptcies as the stock market crashed to historical lows.

Lower stock prices translate to less wealth for businesses, pension funds, and individual investors, and listed companies could not get the much-needed funding for their normal operations.

At the same time, the focus on more companies going public over the last year can be highlighted by firms on the Nasdaq exchange. Worth noting is that in 2020, there was tremendous growth in special purpose acquisition companies (SPACs), mainly driven by the impact of the coronavirus pandemic. With the uncertainty of raising money through the traditional means, SPACs found a perfect role to inject more funds into capital-starving companies to go public.

From the data, foreign companies listing in the United States have grown steadily, with the business aiming to leverage the benefits of operating in the country. Notably, listing on U.S. exchanges guarantees companies liquidity and high potential to raise capital. Furthermore, listing on either NYSE or Nasdaq comes with the needed credibility to attract more investors. The companies are generally viewed as a home for established, respected, and successful global companies.

In general, over the past year, factors like the pandemic have altered the face of stock exchanges to some point threatening the continued dominance of major U.S. exchanges. Tensions between the US and China are contributing to the crisis which will eventually impact the number of listed companies.

 

Courtesy of Finbold.

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Economics

Stock futures open flat as Omicron concerns ease

Dow futures edged up 0.02%, while contracts on the Nasdaq Composite inched up 0.10%…
The post Stock futures open flat as Omicron concerns ease first appeared on Trading and Investment News.

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Dow futures edged up 0.02%, while contracts on the Nasdaq Composite inched up 0.10%

Stock futures opened relatively flat on Wednesday evening, though sustaining gains posted by a three-day recovery rally that was led by cooled investor concerns around the Omicron variant of the coronavirus.

Dow futures edged up 0.02%, while contracts on the tech-focused Nasdaq Composite inched up 0.10%. All major indexes closed up, with the S&P 500 adding 14.46 points to end the session at 4,701.21, just 0.5% short of the trading session on Nov. 24, a day before the latest COVID-19 variant was announced by the World Health Organization (WHO).

The moves were supported by eased virus fears after Pfizer Inc. and BioNTech reported that early lab studies show a third dose of their coronavirus vaccine mitigates the Omicron variant.

The vaccine makers had indicated the initial two doses may not be enough to protect against infection from Omicron. Shares of Pfizer (PFE) traded 0.62% lower on Wednesday, closing at $51.40.

With virus concerns diminishing, investors are pivoting their attention back to economic data, awaiting Consumer Price Index (CPI) figures on Friday to assess the extent inflationary pressures will persist.

If the Omicron variant was to lead to a resurgence in goods spending at the expense of services or to further complicate supply disruptions, there could be a clear inflationary impact, too, HSBC economist James Pomeroy wrote earlier this week in a research note to clients.

He stated: The inflation news in the past few weeks has been decidedly mixed — with upside surprises in both the U.S. and eurozone being offset by the possibility of some of the supply chain issues starting to alleviate, while energy prices have fallen sharply in recent days.

The post Stock futures open flat as Omicron concerns ease first appeared on Trading and Investment News.

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