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- 🚢 Cruisin' Into 2024
🚢 Cruisin' Into 2024
Plus, just what the doctor ordered.
Happy Sunday to everyone on The Street.
The holiday season has brought a surprising and significant gift to American households this year, in the form of a ‘Santa Rally’ on Wall Street.
Robust stock market gains in November and December are poised to significantly enhance the wealth of U.S. households in the final quarter of the year.
Benzinga’s calculations suggest that if these market gains hold until the end of the year, the potential increase in American households’ wealth could approach $5 trillion.
Here's how they backed into that number. Let's hope the market doesn't turn naughty on us heading into the final holidays of the year.
POWERED BY HEAR.COM
Have you heard the good news?
A team of top German engineers has just unveiled the world’s very first hearing aids with dual processing, and the results are clear... Literally.
Why is this so special? Thanks to this cutting-edge German technology, these tiny devices capture speech and noise separately, resulting in groundbreaking levels of noise reduction and speech clarity.
hear.com is so confident you’ll love their product, all devices come with a 45-day no-risk trial. They’ve already got 385,000 happy customers — and counting — and their award-winning customer service will help with anything you need.
Review
U.S. stocks were mixed on Friday, but the Dow Jones Industrial Average notched its third record close in a row.
The index finished 0.2%, or 57 points, higher, and recorded its seventh straight week of gains at 2.9%. Meanwhile, the S&P 500 closed little changed Friday, with a 2.5% gain for the week. The Nasdaq Composite was up 2.9% for the week and finished 0.4% higher Friday.
In earnings news, shares of Costco jumped 4.5% after beating expectations and announcing a $15 per-share dividend. The company also said it sold more than $100 million in gold bars last quarter.
Shares of Olive Garden-owner Darden Restaurants declined 0.4% after missing revenue expectations. Still, the company saw a near-10% year-over-year increase in sales and raised its full-year guidance.
In other company news, shares of General Motors fell 1.4% after announcing plans to cut 1,300 Michigan workers early next year.
In economic news, New York Fed President and voting FOMC member John Williams dampened investor optimism for rate cuts in 2024, saying cuts are not currently being discussed as the committee remains focused on whether its policy is sufficiently restrictive to quell inflation.
U.S. industrial production rose in November, helped by the resolution of autoworker strikes. Meanwhile, the New York Fed’s Empire manufacturing index showed the sector is struggling this month.
Preview
Monday
December NAHB Housing Market Index: This measure of homebuilder sentiment fell to its lowest level since December 2022 last month.
Tuesday
November Building Permits and Housing Starts: Despite interest rate headwinds, October building permits reached their highest level in nearly a year and a half.
Earnings: Accenture (ACN), FuelCell Energy (FCEL), and FedEx (FDX): Investors will watch FedEx earnings and its package volume in particular for consumer spending trends. Last quarter, the logistics company announced demand surcharges for the holiday season.
Wednesday
Weekly 30-Year Mortgage Rate Update: Last week, mortgage rates declined to 7.07%, the lowest level since July.
November Existing Home Sales: Due to a persistent lack of inventory, home sales fell to their lowest level since August 2010 in October.
Earnings: General Mills (GIS), Winnebago (WGO), and BlackBerry (BB)
Thursday
Q3 GDP (Final): The prior (second) estimate of Q3 GDP showed the U.S. economy grew 5.2% on a seasonally adjusted annualized basis, more than the initial estimate of 4.9%.
Weekly Jobless Claims: Last week, initial claims highlighted relative tightness in the labor market, hitting their lowest level since mid-October.
Earnings: CarMax (KMX), Paychex (PAYX), and Nike (NKE): In September, Nike reported a 2% decline in North American sales but saw growth in every other region.
Friday
November Durable Goods Orders: Orders of long-lasting manufactured goods fell 5.4% in October, much more than expected.
Just What the Doctor Ordered
Wall Street Prescribes This Hospital Stock for 2024
HCA Healthcare (HCA) has been under the weather in 2023.
While the S&P 500 is up around 20% year-to-date, HCA has returns of just 8%. The Street expects this underperformance to change. Buy-side analysts give it price targets of over $300. The company’s shares currently sit at roughly $270.
The healthcare firm boasts almost 200 hospitals, as well as urgent-care centers, surgery centers, and other medical facilities.
With its hefty scale, HCA can better negotiate with insurers. Strong pricing power means healthier margins and more capital for investors.
Demand for Hospital Care Isn’t Going Anywhere
Even with the breakthrough in new weight loss drugs like Ozempic, the Street sees demand for healthcare staying strong.
Patients will still find themselves at hospitals for injuries and look for certain cosmetic procedures at clinics.
HCA has been strategically growing its portfolio with diversified care spaces. A growing footprint means patients will stay within its network for a plethora of medical offerings.
Numbers in Top Shape
Executives at HCA are telling investors to expect annual adjusted EPS growth of between 8% and 12% over the next five years.
Labor costs have been difficult for the healthcare sector, but management at HCA is hopeful. They expect a 3% increase in wage costs in the coming year.
If HCA hits its targets, investors could be pleased with returns in 2024.
How will HCA healthcare stock perform in 2024? |
Skin-Vesting
Skincare Is Trending
Skincare is as popular as ever, driven by social media trends where influencers share their skincare routines. This popularity presents a lucrative opportunity for investors as the industry is expected to continue growing.
The beauty industry falls into four categories, and skincare was the lone category with above-average growth annually between 2015 and 2022.
This annual growth is expected to continue through 2027, at an average of 6% each year. By 2027 the skincare industry is expected to be worth $200 billion globally, a 29% jump from its 2018 valuation.
Steady Growth
Revenue in the skincare industry has always been less cyclical than other beauty categories. Makeup and hair care products might be seen as “splurge” items, but skincare products are staples.
Typically, consumers stick with more expensive brands to feel confident about the quality of the ingredients they’re using. Trends show that even in tough financial times, skincare routines stick around.
Skincare boomed during the pandemic, with steady post-pandemic growth even after the spike. The makeup industry has seen several ebbs and flows due to the rise of remote work, but skincare has resisted these cycles.
Skincare Players To Watch
Analysts are bullish on Estee Lauder (EL), the largest player in the skincare industry. However, investors should be wary of the exposure to Asian markets, particularly China, when investing in global beauty companies. The stock is down 46% this year, but analysts believe it will see an uptick in 2024, with share price predicted to rise 7.5%.
Another stock to watch is Coty (COTY), which has managed to evade recent inventory problems plaguing similar companies. The beauty manufacturer is looking to grow its market share in the skincare space. Given the average price target, analysts say the stock has an upside of around 10%.
Don’t overlook the skincare sector when picking your portfolio lineup for 2024.
Are you bullish or bearish on Estee Lauder (EL) over the next 12 months? |
POWERED BY HEAR.COM
Have you heard the good news?
A team of top German engineers has just unveiled the world’s very first hearing aids with dual processing, and the results are clear... Literally.
Why is this so special? Thanks to this cutting-edge German technology, these tiny devices capture speech and noise separately, resulting in groundbreaking levels of noise reduction and speech clarity.
hear.com is so confident you’ll love their product, all devices come with a 45-day no-risk trial. They’ve already got 385,000 happy customers — and counting — and their award-winning customer service will help with anything you need.
Smooth Sailing Ahead
Post-Pandemic Boom
Cruise line stocks were hit hard during the pandemic. A slow post-pandemic recovery has finally propelled the stocks to have an incredible year following a huge uptick in demand.
This sailing trend is expected to continue into the new year, with an estimated 35.7 million customers expected to embark on a cruise in 2024. This is a 4.2 million passenger increase from 2023.
Shares of Royal Caribbean (RCL), one of the biggest cruise lines in the world, are up a whopping 140% in 2023. Carnival (CCL) and Norwegian (NCLH) aren’t far behind, up 120% and 51% respectively.
Last, but Not Least
Cruise lines were some of the last travel companies to recover from the pandemic. Then, a combination of high oil prices, war in the Middle East, and a shutdown of Hawaiian travel due to the Maui fires hampered cruise line travel.
These days, oil prices are low again and Hawaii is open for business. Just since October 31st, Carnival is up 55%, Royal Caribbean is up 38%, and Norwegian is up 37%. Talk about finishing the year strong.
Continuing To Climb
Despite these massive gains, Wall Street analysts are expecting the stocks to climb even higher. Royal Caribbean is considered best-in-class by analysts, largely due to its high-quality ships.
Analysts are still bullish, pointing to a favorable stock price and the fact that cruises are around 30% cheaper than a traditional vacation. However, they want to keep in mind that the industry is susceptible to downturns, highlighted by the events of the past few years.
As post-pandemic travel continues to grow, cruise lines are benefiting from consumer confidence. It’s a sector investors may want to follow as we cruise into the New Year.
Are you bullish or bearish on Royal Caribbean (RCL) stock over the next 12 months? |
Last Week's Poll Results
Which would you rather own?
🟩🟩🟩🟩🟩🟩 🥤 Pepsi (PEP)
🟨🟨🟨⬜️⬜️⬜️ 🧃 Coca-Cola (KO)
What are your thoughts on RPM?
🟩🟩🟩🟩🟩🟩 📈 Buy it
🟨⬜️⬜️⬜️⬜️⬜️ 🙅 Dump it
🟨🟨🟨⬜️⬜️⬜️ 🤔 Wait for a better entry point
Are you bullish or bearish on McDonald’s over the next 24 months?
🟩🟩🟩🟩🟩🟩 🐂 Bullish
🟨🟨🟨⬜️⬜️⬜️ 🐻 Bearish
Join the conversation