The stock market is sending signals that a Biden-led blue wave is getting less certain, says one Wall Street strategist
- While the polls suggest a blue wave victory is in reach for Democrats this November, the stock market isn’t so sure, according to a note from Evercore ISI.
- Wall Street strategists have been forecasting that a blue wave would likely be positive for stocks on hopes of a large stimulus deal shortly after the election, which would help spur a surge in value and cyclical stocks.
- But this week’s rotation out of value and into tech suggests that chances of a blue wave in November are less likely, according to the note.
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Wall Street is increasingly expecting a blue wave victory for Democrats this November after the polls close, which would likely lead to the reflation trade: a surge in cyclical and value stocks at the expense of technology and growth stocks.
But recent trading activity in the stock market suggests odds of a blue wave are less likely, according to a Tuesday note from Evercore ISI.
Specifically, this week’s rotation out of small cap and value and into large cap and growth could be chalked up to declining odds of a Democratic sweep, according to the note.
The firm pointed to the October surprise in North Carolina’s Senate race between Republican Thom Tillis and Democrat Cal Cunningham as evidence for declining chances of Democrats overtaking the Senate.
“The Democratic ‘dream fiscal program’ odds are lower,” Evercore said as explanation for what is driving the rotation back into tech.
Read more: Jeff James has crushed the market this year thanks to a stock pick that’s soared 1,155%. He shares another bet he expects to deliver similar returns – and lays out 3 additional opportunities in tech.
The firm did concede that other factors could be moving tech stocks, including excitement around
Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market’s attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task.
In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.
However, it’s pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company’s real growth prospects.
Our proprietary system currently recommends Progress Software (PRGS) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Research shows that stocks carrying the best growth features consistently beat the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.
While there are numerous reasons why the stock of this business software maker is a great growth pick right now, we have highlighted three of the most important factors below:
Arguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Progress Software is 20.1%, investors should actually focus on the projected growth. The company’s EPS is expected to grow 10% this year, crushing the industry average, which calls for EPS growth of
Shares of Loop Industries (LOOP) – Get Report lost a third of their market value on Tuesday after the activist investment group Hindenburg published a report lambasting the plastics-recycling company and said it took a short position.
The investment firm said it interviewed former employees, competitors, industry experts and company partners as part of its investigation and concluded that Loop is “smoke and mirrors with no viable technology.”
Loop, Terrebonne, Quebec, didn’t immediately return a request for comment.
Former employees told Hindenburg that Loop operated two labs, one reserved for its “two twenty-something lead scientist brothers and their father” and one run by rank-and-file scientists who were unable to replicate results.
The investment firm said that a Loop employee told Hindenburg that scientists were pressured by Chief Executive Daniel Solomita to “lie about the results of the company’s process internally. We have obtained internal documents and photographs to support their claims.”
Loop has claimed to have developed a patented proprietary technology that breaks down a common plastic, PET, using “products purchased from the local hardware store,” Hindenburg said.
“In other words, the company claims to have discovered how to turn worthless trash into pure gold, a feat that multi-billion chemical companies such as DuPont, (DD) – Get Report Dow Chemical, (DOW) – Get Report and 3M (MMM) – Get Report have been unable to achieve on a large scale despite years of efforts,” Hindenburg said in its note.
Loop Industries shares at last check fell 34% to $7.69.
GameStop (GME) – Get Report said Thursday that it entered a multiyear strategic partnership agreement with Microsoft (MSFT) – Get Report that the videogame retailer said would expand its product offerings and enhance its retail infrastructure.
Shares of the Grapevine, Texas, company were soaring nearly 20% to $11.19, while Microsoft was up slightly to $210.59.
Under the agreement, GameStop will standardize its back-end and in-store solutions on Dynamics 365, Microsoft’s portfolio of cloud-based business applications and customer data platform.
GameStop said this would enable store staff to access omnichannel insights about customer preferences and purchasing history, real-time information on product availability, subscriptions, pricing, and promotions.
Associates will be equipped with new Microsoft Surface devices, which will enable them to move freely within the stores.
GameStop said it planned to roll out Microsoft 365 and Microsoft Teams, the business communication platform, to its stores. With Teams, store associates will more easily be able to ask questions and share insights with one another.
GameStop has expanded its Xbox product offerings to include Xbox All Access, which provides an Xbox console and 24 months of Xbox Game Pass Ultimate to players with no up-front cost.
GameStop operates more than 5,000 stores across 10 countries,.
“This is an exciting day at GameStop,” Chief Executive George Sherman said in a statement, “as we announce the advancement of an important partnership that capitalizes on the power of our operating platform and significant market share in gaming to accelerate our digital transformation; drive incremental revenue streams; and over time, further monetize the digital world of gaming.”
Last month, Ryan Cohen, GameStop’s biggest individual investor, reportedly said he believed the company could rival Amazon.com (AMZN) – Get Report and was holding talks with management and several board members.
The Computer and Technology group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has PerkinElmer (PKI) been one of those stocks this year? A quick glance at the company’s year-to-date performance in comparison to the rest of the Computer and Technology sector should help us answer this question.
PerkinElmer is a member of our Computer and Technology group, which includes 613 different companies and currently sits at #11 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. PKI is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for PKI’s full-year earnings has moved 39.91% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
Our latest available data shows that PKI has returned about 30.33% since the start of the calendar year. Meanwhile, the Computer and Technology sector has returned an average of 22.84% on a year-to-date basis. This shows that PerkinElmer is outperforming its peers so far this year.
Looking more specifically, PKI belongs to the Instruments – Scientific industry, which includes 5 individual stocks and currently sits at #75 in the Zacks Industry Rank. On average, stocks in this group have gained 4.82% this year, meaning that PKI is performing better in terms of year-to-date returns.
PKI will likely be looking to continue its