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- 📢 A Pretty Big Announcement
📢 A Pretty Big Announcement
Plus, How Do You Say “Semiconductor” in French?
Happy Sunday to everyone on The Street.
Well, we did it. We made it to our final Sunday send of the year. We aren’t publishing next Sunday.
“But wait, why did you italicize the word Sunday??”
That's because in 2024 The Street Sheet is going daily.
Remember: Earlier this year we asked if you'd like us to create a shorter version of The Street Sheet that was sent out every weekday. 74.4% of you said YES. We asked the same question again the following week to which 72.95% of you said YES. We just wanted to double-check. The biggest feedback we got was to keep the daily version short, so that's exactly what we're doing. More specifically, here's what you can expect.
Starting Tuesday, January 2nd, 2024 you'll receive your first daily edition of The Street Sheet after markets close at 5 pm ET. Our PM newsletter will include a brief review of what you missed during the trading day: market swings and big movers.
It will also include "Tomorrow's Trade, Today" or one idea you can hit the ground running with when markets open the following session. Our goal is to highlight fresh trends and analysis the day before you decide to buy or sell so you have enough time to do your own research. Doing due diligence in the morning before the market opens can sometimes be impossible. We know you have a million things to manage so this is why we're delivering these ideas a day early.
As for the Sunday edition, nothing will change. This weekly review + preview has been an awesome format that people seem to love. We know it's long and at one point we asked if you'd like us to change it, but you said no. So we won't.
Before we go I want to thank all of you for a wonderful year. In January we sent this newsletter to about 50,000 people. Now we're sending it to over 100,000. Thank you for opening, reading, and engaging with our content. Our goal is to earn your trust and respect every time we click the send button. We're excited we get to do that more in 2024, and it wouldn't be possible without you.
Merry Christmas Eve to those who celebrate, and Happy New Year to our entire audience. Next year will be a good one, we can already feel it.
POWERED BY HEAR
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
This past Friday, the S&P 500 moved higher by 0.17% following the release of milder inflation data. The Nasdaq Composite advanced 0.19% while the Dow Jones Industrial Average fell by just 0.05% or 18.38 points, settling at 37,385.97.
Despite the Dow dip on the final day of the week, the positive momentum resulted in the three major averages achieving their eighth straight week of gains. This is the first time a stretch like this has happened since 2017 and 2019 for the S&P 500 and Dow, respectively. Right now the S&P is just 0.9% from its record close.
The Personal Consumption Expenditures (PCE) price index, which is the Federal Reserve's preferred inflation metric, came in lower than anticipated. In November, the core personal consumption expenditures price index rose by a mere 0.1%, showing a 3.2% gain from the previous year, aligning closely with expectations. Economists surveyed by Dow Jones had predicted a 0.1% monthly increase and a 3.3% rise from the preceding year.
Shark Tank's Kevin O'Leary sounded an optimistic note heading into the holiday season in an interview with Fox Business' Larry Kudlow. O’Leary highlighted the performance of the S&P 500 and the Russell 2000, a small-cap stock market index. He emphasized that these small-cap American companies account for 60% of job creation and that there is potential for an improved regulatory environment.
We're going to have a soft landing. And what does that affect most? It's small-cap companies," O'Leary said, adding that the broader equity markets are advancing. "If you own the Russell 2000 [the] last six weeks, you're killing it. So, it's the American economy starting to breathe. I'm very, very bullish," he added.
Notable stock movers on Friday included ANSYS which surged by 12% following a Reuters report that the company is considering various options, including a possible sale. This decision comes in response to takeover interest from potential buyers.
Bristol Myers Squibb rose 2.2% after the company agreed to buy Karuna Therapeutics for $14 billion in cash, gaining a promising experimental schizophrenia drug. KRTX rose 47%.
Lottery.com shares traded lower Friday following gains of 196% on Thursday. The stock remains up by nearly 100% over the past five days after it announced an $18 million investment commitment from Prosperity Investment Management on Thursday.
Shares of Nike also fell 10% on Friday after the company missed revenue estimates last quarter and announced weaker-than-expected guidance due to declining sales from Greater China.
Preview
Here are the biggest economic updates to watch out for next week:
Monday: U.S. markets closed.
Tuesday: Home Price Index, Dallas Fed Manufacturing Index, Dec Consumer confidence.
Wednesday: No major economic updates scheduled.
Thursday: Wholesale & Retail Inventories, Jobless Claims, Dec. Pending home sales.
Friday: Chicago PMI
There are no major earnings reports scheduled for the week. Happy holidays!
Promise Across the Pond
Looking to Europe for 2024’s Stock Picks
Investors are preparing their portfolios for the upcoming year, and Jefferies Group has three top picks in Europe. They estimate that each of these stocks could rise by more than 60% in 2024.
Prudential (PRU.L) is first on the list. The British insurance company had a rough year, tumbling over 20% in 2023.
Jefferies sees potential with Prudential’s prospects in Asia, specifically with the borders reopening in Hong Kong. Healthy cash flow and an attractive risk-reward profile are also helping Prudential make the cut as a top stock pick.
Jefferies expects it to fly over the next 12 months, giving it a price target double its current stock price.
Bank on This
British investment banking firm Standard Chartered (STAN.L) also made the list.
Standard Chartered has had a bumpy year as well. Shares fell sharply in late October after executives disclosed challenges in China.
Jefferies expects clear skies and increased revenues ahead, predicting a 70% potential upside for the firm.
How Do You Say “Semiconductor” in French
Third on the list is a tech materials supplier.
Soitec (SOI.PA) is a French semiconductor materials supplier. The company makes components that are used in building semiconductors that comprise chips used for phones and computers.
Jefferies expects Soitec to grow as demand for semis builds with continued advancements in technology like AI. The stock is up about 9% this year. Jefferies has a price target more than 60% higher than the current share price.
Proactive investors might be able to take advantage of these European companies’ anticipated successes in 2024.
Which European stock will have the best 2024? |
Moving Out and Moving On
Moving Out of Money Markets
Thanks to the Fed’s war on inflation, interest rates have been high this year. This made money market funds an attractive investment vehicle.
But the Fed has set the stage for rate cuts in 2024. As interest rates come down, so will yields on money market funds and high-yield savings accounts. As a result, many investors will be looking for new places to park their funds with better returns.
For the week ending December 13th, there was $5.89 trillion in assets sitting in money market funds, according to the Investment Company Institute. This indicates a $1.09 trillion increase from the end of January.
Where To Next?
According to Josh Brown, CEO of Ritholtz Wealth Management, dividend-paying stocks are a good choice for investors looking to get out of money market funds.
An easy way for investors to move their assets into dividend-paying stocks is by investing in ETFs like the Vanguard Dividend Appreciation Index Fund (VIG). ETFs give investors exposure to a large number of stocks through one singular investment.
The fund reached a 52-week high last Thursday and saw $547.5 million flow into the fund last month.
Opportunity in High Duration Bond Funds
Another strategy experts have been deploying since the Fed reached peak interest rates is extending duration.
Higher durations make an investment more sensitive to price changes due to interest rate changes. Bond prices move inversely from interest rates. If the Fed starts cutting rates, higher-duration debt investments might see a larger price increase.
According to Barry Glassman of Glassman Wealth Services, the Dodge & Cox Income Fund (DODIX) might be a good option for investors looking to increase duration.
Will cash flow out of money market funds and into alternative forms of investment in 2024? The future depends heavily on the Fed, and investors will be watching.
Are you bullish or bearish on money market funds in 2024? |
POWERED BY HEAR
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.
Slow as Molasses
Not Lower, Just Slower
Inflation is cooling, but that doesn’t necessarily mean food prices will come down. It just means that they will increase at a slower pace.
Consumers haven’t been seeing the relief at the checkout line that they were hoping for. There have been fewer food price decreases this year than last year.
However, some packaged food companies have the means to increase end-of-year specials on products.
Purchasing Is Down
According to the USDA’s consumer price index data, year-over-year price increases have slowed. However, grocery store purchases were only 2.1% higher in October of this year compared to the same time last year. This is the lowest year-over-year increase since June of 2021.
Food items with the biggest price drop since last year were eggs, fresh vegetables, dairy, and seafood.
Packaged goods in particular are expected to see some disinflation in the year ahead.
These Stocks Could Benefit
There are a few stocks that might stand to benefit from this environment. Specifically Kraft (KHC) and McCormick (MKC).
Both of these companies find themselves in a position to benefit from holiday promotions and continued product innovation.
Kraft shares are down 11% this year, but up 8% in Q4. Bank of America has the stock at a $40 price target, which would be a 10% increase from Friday’s close. McCormick shares are down 19% this year, but BofA’s $86 price target represents a 28% gain.
Consumers may not see their grocery expenses drop, but they might benefit by investing in the right food suppliers.
Which stock do you think will outperform over the next 12 months? |
Last Week's Poll Results
How will HCA healthcare stock perform in 2024?
🟩🟩🟩🟩🟩🟩 Grow more than 10%
🟨🟨🟨🟨⬜️⬜️ Grow between 1% - 9%
🟨⬜️⬜️⬜️⬜️⬜️ Fall between 1% - 9%
🟨🟨🟨⬜️⬜️⬜️ Fall more than 10%
Are you bullish or bearish on Estee Lauder (EL) over the next 12 months?
🟩🟩🟩🟩🟩🟩 🐂 Bullish
🟨🟨🟨⬜️⬜️⬜️ 🐻 Bearish
Are you bullish or bearish on Royal Caribbean (RCL) stock over the next 12 months?
🟩🟩🟩🟩🟩🟩 🐂 Bullish
🟨🟨🟨⬜️⬜️⬜️ 🐻 Bearish
Join the conversation