Author: Andrew Packer

Stock market strategies

Let’s Talk Money: 10 Stocks to Buy in 2024 According to Wall Street Pros

Posted on by Andrew Packer

With markets ending the year on a strong note, Wall Street analysts are looking bullish for next year. Part of the move higher could be driven by declining interest rates, which would lower the cost for companies to borrow and expand.

Plus, investors and businesses alike have had trillions in cash sitting on the sidelines. Much of that cash earned 5 percent for most of the past year. Lower interest rates may lead to a shift to the stock market.

A booming economy and declining interest rates should prove a boon to casino stocks. These companies have to outlay a tremendous amount of capital to get their operations up and running.

And the costs to operate a casino can be hefty as well, at nearly half of their revenues. However, in a boom, casinos manage to generate a massive profit margin.

That’s why Wall Street analysts are bullish on casino players such as Wynn Resorts (WYNN) and Las Vegas Sands (LVS). Currently, Wynn is up less than 10 percent over the last year, and Las Vegas Sands has largely broken even.

Meanwhile, another sector Wall Street analysts are bullish on is the solar space. Solar stocks tanked in 2023, as rising interest rates and a drop in oil prices made this form of energy relatively more expensive.

Among the solar stocks, First Solar (FSLR) is the most attractive. It’s already started to move higher in the past few weeks. However, it is one of the most undervalued stocks based on analyst target prices.

 

To see the full list of undervalued stocks for 2024, click here.

International Investing

DIY Investor: Outlook 2024: Equity Strategy

Posted on by Andrew Packer

2022 saw a classic bear market as interest rates started to rise. While rates continued higher in 2023, stocks recovered from their 2022 lows, and ended the year right at all-time highs.

For 2024, investors could see stocks move higher, but likely at a slower rate than in 2023. Several factors are at play that could result in stocks heading higher, but in a less obvious way than the 2023 bull market rally.

For starters, companies with higher debt levels may start to feel the pinch of higher interest rates. Companies with low amounts of debt to service and strong cash flows could fare much better.

That would reflect a rotation in the market. That’s healthy for a stock market rally over the long term. Such a rotation may have already started in the last quarter of 2023.

Globally, markets look more mixed going into the new year. The United States is showing declining inflation and a job market that’s holding up well.

However, in Europe, data points to a slowing economy. Potentially, it could even see a recession in the coming months. The same is true with China, which has been slowing internally, as its debt-laden real estate sector has weighed heavily there.

That suggests investors may get some contrarian opportunities in those global regions. But the best bet for 2024 is still the United States.

 

To read the full analysis, click here.

Economy

Game of Trades: This Time Is NOT Different

Posted on by Andrew Packer

In 2022, most economists predicted a recession within the next 12 months later. Some predictions were mild. Others weren’t. Either way, none of those predictions came to pass in the time predicted.

However, there are several factors weighing on the economy that could cause a recession to hit in 2024. Given the lag time between a policy change and its impact on the economy, we could already be in one now.

For instance, while the unemployment rate has held up well, it’s started to trend higher. That’s been the goal of the Federal Reserve.

The central bank is fighting inflation. And one way to ensure inflation gets down and stays down comes from the reduced spending demand of out-of-work consumers.

The Fed’s tool has been interest rates. They’ve raised at their fastest pace in over 40 years.

And that’s restricted bank lending, which also revealed some weaknesses in the banks. Such weaknesses could return and impact markets in 2024.

The rapid increase in rates has also largely frozen the housing market. Existing homeowners don’t want to move, as it means going from a 3 percent mortgage to nearly 7 percent  at today’s rates.

The bottom line is that none of the dangers to the economy that existed at the end of 2022 have changed. 2024 could see some of those dangers rear their head.

 

To watch the full video, click here.

Economy

A Wealth of Common Sense: The Biggest Risk in 2024

Posted on by Andrew Packer

What a difference a few months can make! At the end of the autumn, investors were fearful due to rising interest rates and falling stock prices. That trend has reversed in the final months of 2024. That particular risk appears muted today.

Going into the new year, investors should start by thinking about risks. In particular, think about potential risks that nobody will see coming in 2024.

Investors can never truly prepare for the unexpected. 2020’s pandemic outbreak wasn’t on any investor’s radar the year or even six months before the world tried shutting down the economy.

Such outside events can and do happen with some regularity. Their damage varies. However, in time, markets will recover. But those who are too bullish going into such a shock are in for a rude awakening.

That could be the case with many investors today. Markets have shifted from extreme fear to extreme greed. While many issues weighing on markets such as inflation have lessened, other risks exist.

That’s why it’s prudent for investors to stay diversified. And be willing to take profits on trades as they occur. Holding some cash and cash-generating investments will also prove handy to reduce the impact of unexpected events.

When we look back on 2024 in 12 months, we will likely think the most about unknown events that impacted stocks the most.

 

To read the full analysis, click here.

Stock market

Elliott Wave Trader: S&P Holding at Wave 3… Seasonal Drift Higher

Posted on by Andrew Packer

The past two months have offered one of the strongest short-term rallies in market history. Stocks soared in November, reversing October’s big selloff and oversold levels. In December, the rally continued, at least at a slower pace.

From a technical standpoint, markets are potentially just partway through the middle of an Elliott Wave pattern. If so, a short-term pullback could be in play in the coming weeks.

Such a pullback would allow stocks to get off of their overbought technical indicators. An attempted drop lower the week before Christmas wasn’t enough to trigger a such a pullback.

Following such a drop, the Wave 4 of the Elliott Wave would be completed. That would set markets up for a final big move higher in Wave 5.

Given the current prices of stocks, that would mean the markets hitting a new all-time high in the months ahead. Historically, January is a strong month for the stock market, particularly in an election year.

Investors following Elliott Wave theory would want to target such a pullback to buy stocks ready to trend higher.

For a big move higher, tech stocks would likely offer the biggest percentage rally move in the short-term.

Following such a jump, markets may consolidate, or start a new trend lower. Investors will want to look for indications either way to prepare for the next big move following a Wave 5.

 

To watch the full analysis, click here.

Cryptocurrencies

Bitcoin Magazine: 21 Reasons to Be Optimistic About Bitcoin in 2024

Posted on by Andrew Packer

The stock market has performed well in 2023, reversing the 2022 bear market. Many traders see the potential for further gains next year. However, it’s also possible that stocks take a tumble if the economy slides into a recession.

For other asset classes, it’s largely the same story. But for bitcoin, and the broader cryptocurrency market, events are unfolding that appear perfect for bullish investors.

The biggest bull trend is the expectation that the SEC will approve a bitcoin ETF in the coming weeks.

That would mean creating an investment vehicle that makes bitcoin easy to own. And easy to hold in a tax-deferred retirement account like a Roth IRA.

If a bitcoin ETF is approved, other crypto-related ETFs will likely follow suit as well.

Plus, next year, bitcoin will have its next halving. That’s the process where the reward for mining bitcoin is cut in half. That’s part of gradually reducing bitcoin’s outstanding total until 21 million are minted.

Typically, halving events are a supply shock. They result in massive price gains in the months following that event. That could set 2024 up for some big moves, with bitcoin likely testing its old high near $69,000.

Also, regulators are changing the rules for companies that hold bitcoin. They will be able to mark the asset to its current value.

That change is coming starting 2025, and will make it easier for companies to buy and hold bitcoin.

These moves and others suggest a great year ahead for bitcoin, and likely with it most other cryptocurrencies.

 

To view the full list of bullish reasons to own bitcoin in 2024, click here.

Income investing

Dividend Growth Investor: 17 Companies Spreading Holiday Cheers to Shareholders

Posted on by Andrew Packer

With markets heading to new all-time highs, valuations are getting stretched for some companies. That could mean a pullback soon for firms whose shares have soared.

But it could also mean an opportunity for investors who focus on buying out-of-favor, dividend-paying stocks. These stocks are shares of companies dedicated to paying part of their earnings out to shareholders over time. Many companies that pay a dividend plan to increase it over time also.

Companies that increase their dividends over time can become dividend achievers and aristocrats. They make for stocks worth buying during market downturns with a long-term holding period in mind.

Many companies have announced dividend increases to end 2023 on a strong note.

For instance, American Tower (AMT), is a real estate investment trust (REIT) that owns cell towers.

AMT shares pay a 3.2 percent dividend yield, and just increased their payout by nearly 5 percent. Over the past 5 years, they’ve grown the dividend an average of 16.6 percent.

Waste Management (WM), one of the largest operators of waste management trucks and facilities, pays a 1.7 percent dividend. But it just raised its dividend by over 7 percent, and has raised its yield by nearly 9 percent on average over the last 5 years.

Dividend growth stocks may not pay the highest yields, but growth over time leads to higher prices. That creates big returns for patient investors. Many of these stocks underperformed in 2023, and look to outperform next year.

 

To view the full list of dividend growers now, click here.

Stock Picks

Joseph Carlson: Top Ten Deep Value Stocks for 2024

Posted on by Andrew Packer

For most of 2023, big-cap tech stocks dragged the overall market index higher. Since the October lows and swing higher, more stocks have trended higher. That could be a sign that the markets are rotating, letting a sector other than tech take the lead.

Usually, a market rotation is a good long-term sign for a bull market. For those still concerned about the market’s recent move higher, there’s another trend to play as well. Value stocks.

While value is a subjective term, it typically means looking at the value of a company as a business, and buying shares at a discount to that value.

With so many stocks starting to now move higher, value plays could be a surprising winner in 2024.

One area that could fare well are the gold stocks. While the yellow metal recently hit a new record high this year, companies like Barrick Gold (GOLD) are flat for 2023.

That could change next year. Higher gold prices mean higher profits for the gold miners.

And while Barrick’s earnings are up 53 percent over the last year, its profit margin is still less than 1 percent. If that explodes higher, shares likely will too.

Value can also come in large-cap plays. Conglomerate Berkshire-Hathway (BRK-B), tends to get overlooked when tech stocks are rising.

But it’s a slow-and-steady player that will outperform and hold its own when tech stock move out of favor.

 

To view the full list of value opportunities going into 2024, click here.

 

Economy

Thoughtful Money: ‘Buy Everything!’ Says Wall Street As Fed Signals 3 Rate Cuts Are Coming

Posted on by Andrew Packer

The holidays hit the stock market early this year. The December meeting minutes for the Federal Reserve hinted at three cuts to interest rates next year. That reflects a bullish outlook that inflation is declining.

It also would make capital less expensive to borrow. That could help improve conditions in the housing market, which have frozen somewhat. And ease off the borrowing costs for businesses and the government.

However, while markets are cheerful now, history suggests it could soon be time to get cautious. That’s because interest rate cuts typically follow ahead of a recession.

They’re a move that occurs too late – and often too little in impact – to stop one underway. That’s because there’s typically a 12-18 month lag for the Fed’s decisions to ripple through the economy.

Remember, the Fed’s policy in raising interest rates was to slow inflation. Ultimately, higher interest rates slow the economy. That means job cuts.

In 2023, high-profile layoffs in big tech companies did little to change the unemployment rate. That could change in 2024.

Right now, the thought of interest rate cuts next year have sent all assets higher. That includes stocks, bonds, cryptocurrencies, and commodities.

In a rate cut environment ahead of a recession, all assets could see their price gains reverse instead.

That suggests that investors should look to get cautious once the Fed starts to cut interest rates. While it might simply be an abundance of caution, it could help reduce losses in a market selloff.

 

To watch the full interview, click here.

Economy

Game of Trades: A Once In a Lifetime Financial Event Is Here

Posted on by Andrew Packer

For the past 40 years, interest rates have generally moved in one direction – down. Over the past year and a half, however, that’s changed. Rates are on the rise. And interest rates stand at their highest level in 15 years.

They’re still below their average level from the post-World War II era. But today, many see interest rates moving down again in the next year as inflation fears ease.

While that’s the current scenario the market is moving around, another trend could play out. That’s the trend of the period just before interest rates peaked in 1980. The trend? Continually rising interest rates.

The last rising interest rate cycle started around 1945 and took decades to play out. And the inflation of the 1970s wasn’t in a straight line. It moved higher, then lower, before surging higher again.

Investors should be aware that historic cycles often repeat. And at some point in the next few years, conditions could set up for a similar surge higher inflation again. Possibly as soon as 2024.

Should that happen, the economy will likely move to a recession to adjust. And stock valuations will drop to reflect the damage done by inflation.

If the 1970s taught investors anything, it was to invest in short-term bonds.

Maturing bonds could be reinvested at higher rates. And the decade was a boom time for commodities, thanks in part to oil surging over ten-fold over the decade.

 

To watch the full historical analysis, click here.