Markets tried to find a direction to end the trading week. Despite the Federal Reserve declaring that more interest rate hikes are coming, possibly as early as July, FOMO took center stage. That’s causing even institutional investors to move cash off the sidelines. But investors still need to be careful. Higher interest rates will be with us for some time, and that will put a cap on earnings and market gains.
There are opportunities to be found, but investors will have to be more selective. Still, the best companies will continue to be the best companies, and they do exist in every sector. Next week will be a shortened trading week as the markets are closed for the Juneteenth holiday. Investors will get more information on housing as well as the latest read on the leading economic indicators. The MarketBeat team will be looking at those stories and putting them into context in their market analysis. Here are some of the most popular articles from this week.
Articles by Jea Yu
Artificial intelligence (AI) is driving FOMO in the market. However, many investors may not be familiar with AI and in what differentiates one company from another. As Jea Yu writes, that’s an ideal reason to consider the Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ). You’ll get exposure to the biggest names in AI, such as Nvidia Corporation (NASDAQ: NVDA) and Meta Platforms, Inc. (NASDAQ: META) as well as some lesser-known names. One of the names you won’t see is Farmer Brothers Co. (NASDAQ: FARM). In fact, you may not be familiar with the company, but you’ve likely sampled its products at some of your go-to fast-food chains. The private-label company is using, you guessed it, AI to create an optimized pricing strategy. Yu was focusing on another emerging story that may affect markets later this year. Around Labor Day, the moratorium on student loan payments will come to an end. That could have an impact on the economy in general and, as Yu writes, may be a particular drag on the retail sector.
Articles by Thomas Hughes
Summer officially kicks off next week. That means it’s time to look ahead to the second quarter earnings season that kicks off in July. As Thomas Hughes writes, investors should expect more of the same, which means a mixed bag depending on which sector is reporting. The key for long-term investors will be to remain patient as the market gains are forecast to fade in the second half of the year. One sector expected to post strong earnings is the semiconductor sector. This week, Advanced Micro Devices, Inc. (NASDAQ: AMD) announced its entrance into the AI arena with an AI chip that is already putting Nvidia on notice. Next week will bring information on housing data, but this week investors heard from the homebuilder Lennar Corp. (NYSE: LEN). The company had a solid quarter, but a declining backlog suggests rougher times are ahead. Hughes was also recapping the latest news on one of the most popular stocks among MarketBeat subscribers, Mullen Automotive, Inc. (NASDAQ: MULN). This week the news was about the company seeking shareholder approval for a second reverse stock split and whether that will be the final straw for speculative investors.
Articles by Sam Quirke
Generative AI is the specific force pushing AI stocks to frothy highs. So it may surprise you to hear that you can still get value from one of the biggest names in the sector. But as Sam Quirke writes, that’s the case with Alphabet, Inc. (NASDAQ: GOOGL). The stock is up 50% in 2023, but as Quirke points out, there are three reasons to believe that GOOGL stock may be one of the best big tech plays of the summer. Quirke also points out that a similar story is emerging with Meta Platforms, Inc. (NASDAQ: META). After Apple, Inc. (NASDAQ: AAPL) launched its VisionPro, many analysts were sounding bearish alarms for Meta. But Quirke makes a case as to why you shouldn’t sleep on META stock. And as the news from Advanced Micro Devices reminded investors, the chip sector is roaring back from a dismal 2022. That means investors should start to look at Broadcom Inc. (NASDAQ: AVGO). The cash-rich company has a valuation that’s one-third that of Nvidia and still has strong upside despite trading at a new all-time high.
Articles by Chris Markoch
One of the best ways to identify stocks that are ready to move higher is to see what the institutions are buying. That’s what Chris Markoch was observing with oil and gas stocks which are seeing heavy institutional buying. As Markoch writes, this means that it may be time for you to consider putting your money into this sector which may be ready to reverse its downward trend. Markoch was also looking at The Boeing Company (NYSE: BA). After several years of headwinds, the airplane manufacturer is seeing a robust backlog and steady production. And even with the stock price showing a hefty gain this year, Markoch points out that there is likely to be more upside ahead.
Articles by Kate Stalter
UnitedHealth Group Inc. (NYSE: UNH) single-handedly dragged down the Dow briefly this week. The health insurer is expecting to see more claims to pay out as elective surgeries are on the rise. But as Kate Stalter notes, what’s bad for health insurers is potentially great news for shareholders of medical device companies and surgical centers. Stalter was also writing about three dividend stocks that are not only increasing their dividends but are also objectively undervalued, which gives investors an opportunity to generate a strong total return in a sideways market. And summer is a time when many people get back to the golf course. Or, at the very least, to have an experience that makes you feel like you are. That makes it a good time to remind you that shares of Topgolf Callaway Brands Corp. (NYSE: MODG) look like they’re on par for a rebound.
Articles by Ryan Hasson
AI-related companies are popping up like weeds. But as Ryan Hasson points out, you have to carefully weigh the risk against the reward when choosing small-cap AI stocks. That same advice may apply to Palantir Technologies (NYSE: PLTR). It’s not a small-cap company, but the controversial company’s stock has more than doubled this year on the basis of a compelling AI story. As Hasson points out, however, analysts aren’t buying the Palantir story, and that could hold the stock back in the short term. And speaking of risk, many investors hoping to minimize their risk in the tech sector have plowed into the Invesco QQQ ETF (NASDAQ: QQQ). But as Hasson notes, this ETF is heavily weighted to the tech names that are moving the sector higher. Investors should take care to manage their downside risk.
Articles by Pat Crawley
In a busy news week, the news that the Federal Trade Commission (FTC) is attempting to block the acquisition of Activision Blizzard, Inc. (NASDAQ: ATVI) by Microsoft Corporation (NASDAQ: MSFT) may have missed your radar. If so, you’ll want to read what Pat Crawley had to say about it and what it means if you’re an investor in Microsoft. And if you can’t beat ‘em, join ‘em. That’s the philosophy that Chegg, Inc. (NYSE: CHGG) is taking. Online learning company stands to suffer the most from the emergence of AI. But the company is fighting back with its own chatbot. It’s too early to tell if the strategy will work, but it’s worth putting the company on your watchlist.
Articles by Gabriel Osorio-Mazilli
Contrarian investors love a good comeback story, and this week, Gabriel Osorio-Mazilli offered up two of them. The first is The Walt Disney Company (NYSE: DIS). The House of Mouse has seen its stock beleaguered for many reasons. But with DIS stock trading at less than 50% of its all-time high, Osorio-Mazilli makes the case for why the stock may be getting ready to return some magic to shareholders. An even bigger comeback story may be emerging with Peloton Interactive, Inc. (NASDAQ: PTON). The stock is down 90%, but the company is attempting a pivot into a more service-oriented company that will generate revenue from subscription services. And while investing in the energy sector isn’t contrarian, it is going against the price of oil, which remains stubbornly low. However, like the market, oil prices will turn around before the economy does. That’s why you may want to consider owning Shell, plc (NYSE: SHEL). The company just raised its dividend and announced a share buyback program which makes the stock a more compelling buy.
Articles by MarketBeat Staff
If the economy is weakening, someone forgot to tell the cruise line industry. It appears that consumers can’t get on cruise ships fast enough. And as the MarketBeat staff writes, that’s pushing shares of Carnival Corporation & plc (NYSE: CCL) to a 52-week high. And as our writers point out, although there may be some choppy seas in the short term, there is a strong long-term outlook. This week the MarketBeat staff was picking up on a theme several of our writers have been mentioning, animal healthcare stocks. Pets have become big business and a very investable opportunity. Our team shows you how to vet these stocks as you perform your due diligence. And if you’re looking for a quick win heading into the summer, the staff offered up three large-cap stocks that just got upgraded by analysts.