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5 Stocks Financial Advisors Are Watching Closely

Between January 13 and January 17, the Dow Jones Industrial Average advanced by 1.53%, while two other benchmark indexes, the S&P 500 and NASDAQ Composite appreciated by 1.26% and 1.24%, respectively. The bullish sentiment was fueled by positive economic data, the signing of the phase one trade agreement between the US and China and a strong start to the fourth-quarter earnings season.

In the US, housing starts surged by 16.9% in December, reaching a 13-year high. Retail sales advanced by 0.3% last month, which shows that the economy maintained a growth trajectory towards the end of 2019. In China, industrial production surged by 6.9% on the year last month, which represents the highest pace of growth in nine months, although the economic growth in China slowed to 6.1%, which was still in line with expectations.

The details from the US-China trade deal showed China increasing purchases of manufacturing, energy and agricultural goods and services by at least $200 billion over two years, including $77.7 billion in acquisitions of manufactured goods, $32 billion in agricultural products, $52.4 billion in energy, and $37.9 billion in services. In addition, China will submit an action plan to strengthen intellectual property protection within 30 days and will stop pressuring American companies to share technology with local joint-venture partners. However, despite signing the deal, tariffs on Chinese imports remain in place until the agreement’s second phase is completed.

Moreover, the fourth-quarter earnings season kicked off last week, with many large financial institutions, including JPMorgan Chase & Co. (NYSE: JPM) and Citigroup Inc. (NYSE: C) posting strong quarterly earnings. According to FactSet, by January 17, 9% of companies in the S&P 500 posted their results, 72% of which managed to beat earnings estimates and 63% posted better-than-expected revenues. Going forward, the expectations for the current quarter are modest, with analysts forecasting a 2% decline in profits among S&P 500 companies.

In the meantime, let’s take a look at some companies that were in the spotlight of Financial Advisors last week, according to TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors. Tesla (NASDAQ:TSLA) ranked on the first spot as the stock dipped by 2.74%. The company’s shares started the week strongly amid analysts at Jefferies boosting their price target on the stock to $600 from $400. The analysts cited strong sales from power storage and battery sales segments and expectations for the company to turn profitable. On the other hand, on Thursday Morgan Stanley cut the stock to ‘Underweight’ from ‘Equal Weight’, saying that the sustainability of the stock’s momentum is uncertain over the long-run given risks surrounding the company’s business in China, among other factors.

The second and third spot in TrackStar’s list were taken by Amazon.com, Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL), followed by Canopy Growth Corp (NYSE: CGC) and Eversource Energy (NYSE: ES).

In this article, let’s focus on Canopy Growth Corp (NYSE: CGC), which is a stock that rarely pops up as one of the most searched by Financial Advisors. The Canadian cannabis giant has seen its stock surge by 24% so far this year, amid a series of developments, such as the legalization of recreational sales in Illinois. Going forward, a number of states are also expected to legalize recreational sales this year, with New York, New Jersey, Connecticut and Pennsylvania among those most likely to make the move.

In the meantime, Canopy Growth is expected to report its fiscal third-quarter results. The earnings season in the cannabis industry kicked off with OrganiGram Holdings Inc (NASDAQ: OGI) last week. Organigram beat top and bottom-line estimates and its revenue more than doubled over the year. The results were seen as encouraging by investors, who in turn rushed to buy other names, including Canopy Growth.

In another development, Canopy said on Friday that it would extend the market launch of its cannabis beverages. Despite making a lot of progress in scaling the production process for the beverages in the seven weeks since it received the license in November, the scaling process is still not completed, the company said. Therefore, in order to deliver products that “meet our customers high standards”, Canopy decided to postpone the launch date of cannabis beverages. Nevertheless, the company said the delay will not have a significant impact on its revenue in fiscal 2020.

News Team by — January 23, 2020 By News Team in Markets
‘ONE-SIZE-FITS-ALL’ CANCER TREATMENT COULD BE ON THE HORIZON AFTER SCIENTISTS DISCOVER NEW IMMUNE CELL BY ACCIDENT

Scientists have discovered a new cell in the immune system that can kill many types of cancer, which they hope could one day be used to create a “one size fits all” treatment for the disease.

In mice experiments and in lab dishes, the team showed that a new type of what are known as T-cells could detect a range of cancerous cells, while differentiating them from healthy cells.

A T-cell is a type of white blood cell in the immune system, which both helps to fight off infections as well as cancers. These new T-cells and their special receptors can home in on and kill lung, skin, leukemia, colon, breast, prostate, bone, kidney, cervical, and ovarian cancers. The researchers published their findings in the journal Nature Immunology.

The team believes the receptors on the T-cells are able to detect cancer through their interaction with a molecule called MR1, which is present on the surface of all human cells. The researchers believe MR1 may be signaling the compromised metabolism of the cell to the T-cell receptors.

Study co-author Garry Dolton told BBC News: “We are the first to describe a T-cell that finds MR1 in cancer cells—that hasn’t been done before, this is the first of its kind.”

Lead author of the study, professor Andrew Sewell of the Division of Infection and Immunity at Cardiff University, U.K., told Newsweek the team identified the cell after examining samples from a blood bank.

“We were looking for something else! All the best scientific discoveries are made by mistake,” said Sewell.

Sewell told The Telegraph: “This was a serendipitous finding, nobody knew this cell existed. Our finding raises the prospect of a ‘one-size-fits-all’ cancer treatment, a single type of T-cell that could be capable of destroying many different types of cancers across the population. Previously nobody believed this could be possible.”

The immune cell may be “quite rare, or it could be that lots of people have this receptor but for some reason it is not activated. We just don’t know yet,” he said.

Scientists hope the finding is an important step forward for what is known as immunotherapy to treat cancers. In recent years there have been leaps forward in using the body’s immune system to attack the disease, such as with what is known as CAR-T therapy, explained Astero Klampatsa, team leader in cancer immunotherapy at The Institute of Cancer Research, London, who did not work on the study.

But “CAR-T cells have to be engineered for each patient individually, to take into account the fact that each person’s immune cells have their own molecular ‘signature’—making the therapy very expensive and laboursome,” Klampatsa said in a statement. What’s more, CAR-T cells can be used to treat cancers like leukaemia, but not for solid tumours.

Experts not involved in the study have hailed the finding as “very exciting,” but stressed the research is in its early stages and it isn’t yet clear if it can be used in patients.

Daniel Davis, professor of immunology at the University of Manchester, said: “In general, we are in the midst of a medical revolution harnessing the power of the immune system to tackle cancer. But not everyone responds to the current therapies and there can be harmful side-effects.”

He welcomed the team’s “exciting discovery,” but added, “We still need to understand exactly how it recognises and kills cancer cells, while not responding to normal healthy cells. At the moment, this is very basic research and not close to actual medicines for patients.

“But in the long term, the hope is that this type of immune cell could be the basis of new immune therapies, either by infusing these cells directly into patients or by unleashing their capacity to act. There is no question that is a very exciting discovery, both for advancing our basic knowledge about the immune system and for the possibility of future new medicines,” said Davis.

Dr. Alasdair Rankin, director of research and policy at the blood cancer charity Bloodwise, said: “While CAR-T therapy has been one of the most remarkable breakthroughs in blood cancer treatment in recent years—offering the last chance of a cure in many cases—its use has been limited to a small number of cancer types, it is very expensive and not everyone will respond.

“The development of a ‘one size fits all’ type of immunotherapy, which could target different types of cancer cell and does not need to be manufactured for each individual patient, is an exciting prospect.

Rankin added: “It is still early days and we are a while off from confirming whether this approach will definitely work in patients. If it can be achieved, it could deliver new and kinder treatment options for people living with cancer, who often experience debilitating side effects as a result of their treatment.”

Klampatsa said: “The new findings are at a very early stage, but they’re an exciting step in the right direction, and brings us one step closer to ‘off-the-shelf’ cell-based immunotherapy.”

News Team by — January 22, 2020 By News Team in Global News
These are the nine potential names for the Mars 2020 rover. Your vote can help NASA decide

And then there were nine. Students across the US, ranging from kindergarten to high school, submitted more than 28,000 potential names for NASA’s Mars 2020 rover. A panel of 4,700 volunteer judges whittled that list down to 155 semifinalists.Now, there are nine names left standing in the contest. And your vote in an online poll, which is open now through January 27, could help name the next generation of rover that will roam across Mars after it launches this summer. The finalists include:

  • Endurance, (Kindergarten to 4th grade, by Oliver Jacobs of Virginia)
  • Tenacity, (Kindergarten to 4th grade, by Eamon Reilly of Pennsylvania)
  • Promise, (Kindergarten to 4th grade, by Amira Shanshiry of Massachusetts)
  • Perseverance, (5th to 8th grade, by Alexander Mather of Virginia)
  • Vision, (5th to 8th grade, by Hadley Green of Mississippi)
  • Clarity, (5th to 8th grade, by Nora Benitez of California)
  • Ingenuity, (9th to 12th grade, by Vaneeza Rupani of Alabama)
  • Fortitude, (9th to 12th grade, by Anthony Yoon of Oklahoma)
  • Courage, (9th to 12th grade, by Tori Gray of Louisiana)

“Thousands of students have shared their ideas for a name that will do our rover and the team proud,” said Lori Glaze, director of NASA’s Planetary Science Division in Washington. “Thousands more volunteered time to be part of the judging process. Now it is the public’s opportunity to become involved and express their excitement for their favorites of the final nine.”Once the poll closes, each contestant will present their name to a panel that includes Glaze; NASA rover driver Nick Wiltsie; NASA astronaut Jessica Watkins; and Clara Ma, who named the Curiosity rover when she was a sixth-grade student in 2009.

The winning name and the student who created it will be announced on March 15. The student will also get the chance to watch the rover launch in July from Cape Canaveral.The rover will join a growing family of NASA missions currently operating on and around Mars, including the Curiosity rover, the InSight stationary lander and the Mars orbiters.

When the rover lands on the Red Planet in February 2021, it will touch down in Jezero Crater, the site of a lake that existed 3.5 billion years ago. The next generation rover will build on the goals of previous robotic explorers by collecting the first samples of Mars, which would be returned to Earth at a later date.The 2020 rover’s work will begin in areas of Jezero Crater, where it will search for signs of ancient life, including mineral deposits and perhaps even microscopic fossils. If 2020 samples these sites, the intriguing soil will be stored in metal tubes, and the data it collects may be able to help scientists know if they’ve found a biosignature on Mars.But the new rover will also be on a mission to lay the groundwork for future human exploration by testing out instruments that will use ground-penetrating radar for the first time, study weather science and convert carbon dioxide to oxygen.

News Team by — January 22, 2020 By News Team in Global News
Honda, Toyota recall 6 million vehicles over air bag flaws

DETROIT — Two different air bag glitches have forced Toyota and Honda to recall over 6 million vehicles worldwide, and both problems present different dangers to motorists.

The Toyota TM, +1.67% recall affects about 3.4 million vehicles globally and is being done because the air bags may not inflate in a crash. The cars have air bag control computers made by ZF-TRW that are vulnerable to electrical interference and may not signal the bags to inflate.

The problem could affect as many as 12.3 million vehicles in the U.S. made by six companies. It’s possible that as many as eight people were killed when air bags didn’t inflate. U.S. safety regulators are investigating.

Honda’s HMC, -0.68% recall covers about 2.7 million vehicles in the U.S. and Canada with Takata air bag inflators. But they’re a different version than the ones blamed for 25 deaths worldwide. Still, it’s possible the air bags could blow apart a metal canister and hurl shrapnel at drivers and passengers.

Both recalls were announced on Tuesday.

In a statement, Toyota said the computer may not have adequate protection against electrical noise that can happen in crashes, such as when the vehicle runs under a different vehicle. The problem can cause incomplete opening of the air bags, or they may not open at all. Devices that prepare seat belts for a collision also may not work.

In most cases Toyota dealers will install a noise filter between the air bag control computer and a wiring harness. But in some vehicles dealers will inspect the computer to determine if it needs the filter. Owners will be notified by mid-March.

The recall covers certain 2011-2019 Corollas, the 2011 to 2013 Matrix, the 2012 through 2018 Avalon and the 2013 to 2018 Avalon Hybrid in the U.S.

Toyota wouldn’t say if it will offer loaner cars to people who fear their air bags might not protect them. A spokeswoman suggested that owners call its customer hotline to discuss their issue at (800) 333-4331.

In March of 2017, the U.S. National Highway Traffic Safety Administration began investigating problems with ZF-TRW air bag computers. The probe was expanded in April of last year to 12.3 million vehicles made by Toyota, Honda, Kia, Hyundai, Mitsubishi and Fiat Chrysler from the 2010 through 2019 model years.

Toyota joins Hyundai, Kia and Fiat Chrysler in issuing recalls for the problem. Four deaths that may have been caused by the problem were reported in Hyundai-Kia vehicles and three in Fiat Chrysler automobiles. The investigation was upgraded after investigators found two serious crashes involving 2018 and 2019 Toyota Corollas in which the air bags did not inflate. One person was killed. Toyota said it’s cooperating in the probe, which is continuing.

NHTSA is evaluation how susceptible the air bag control units are to electrical signals as well as other factors that could stop air bags from inflating. In documents, the agency said that it didn’t find any other cases of electrical interference in Hyundai, Kia or Fiat Chrysler vehicles that used the ZF-TRW system but were not recalled.

The Honda recall, also announced Friday, covers certain Honda and Acura vehicles from the 1996 to 2003 model years. Honda vehicles included are the 1998 to 2000 Accord Coupe and Sedan, the 1996 to 2000 Civic coupe and sedan, the 1997 to 2001 CR-V, the 1998 to 2001 Odyssey and the 1997 and 1998 EV Plus.

Acura vehicles covered are the 1997 and 1998 2.2CL, the 1997 to 1999 3.0CL, the 1998 and 1999 2.3CL, the 2001 and 2002 3.2CL, the 2001 and 2002 MDX, the 1998 to 2003 3.5RL, and the 1999 to 2001 3.2TL.

News Team by — January 22, 2020 By News Team in Global News
IBD Live Stocks To Buy And Watch: Costco, UnitedHealth, Tesla Make Notable Moves

If you tuned into the daily IBD Live stream Tuesday, you saw the Team discuss many top stocks to buy and watch. UnitedHealth (UNH), Costco Wholesale (COST) and Tesla (TSLA) were all on the move in the stock market today and are also members of IBD Leaderboard.

Tuesday’s full IBD Live show is now available for subscribers.

During the livestream, an IBD Live viewer asked the Team an important question. Why does Leaderboard have more than 20 positions? Isn’t the strategy to invest in only 8 to 12 stocks maximum at a time?

IBD’s Chief Content Officer Chris Gessel explained in detail why IBD has gone down this road of having more stocks on Leaderboard than in previous years. The Team also discusses why investors should consider doing the same.

IBD Leaderboard Adds More Stocks

Many IBD investors have gotten into the habit of selling off half of an initial stock position as a major earnings event approaches. Rather than hold idle cash, half-position selling often results in other new positions added in their place. Thus, you may have noticed an increasing number of total positions on IBD Leaderboard.

Back in Q1 of 2019, several high-priced, high-profile leading stocks on Leaderboard failed badly soon after strong breakouts, due to unexpected earnings report misses. “Due to how the market was acting, it became very difficult to have a concentrated portfolio. All these major stocks were having problems early on in their breakouts due to (missed) earnings,” Gessel said.

“That made us more cautions about holding full positions into earnings and that’s why we’ve gotten to this point.”

IBD Head Market Strategist Mike Webster chimed in on how a diversified strategy also allows investors to feel comfortable when holding more volatile stocks. “Personally, I’m spreading myself out more than I ever have in my whole career and it’s allowing me to sleep at night — even though I’m trading some crazy, volatile stocks right now.”

Ultimately, portfolio organization is personal. The IBD Live Team noted that portfolio concentration can still work for skilled traders. “If you want to be orthodox, pick five to eight stocks to buy from the current Leaderboard list,” Webster said. “Bill (O’Neil, founder of Investors Business Daily) has always concentrated his portfolio. He would boil it down to maybe three or four stocks, then eventually one or two.”

IBD Live Leaderboard Breakout: Costco Stock

Three breakouts to buy and watch during Tuesday’s IBD Live were Costco stock, UnitedHealth stock and Tesla stock.

Costco stock broke out nearly 3% higher on Tuesday above a 307.30 flat-base buy point in heavy volume. After the breakout, Costco stock was raised to a full position on Leaderboard. Shares of Costco stock are now actionable inside the 5% buy zone. The IBD Live Team cautioned investors of the lagging RS line but stated that overall, Costco stock looks strong.

“What’s bad about it? The relative strength line. What’s great about it is it’s a slow pokey stock. So if you’re trading something more volatile, you want something like Costco stock to balance you out,” said Mike Webster.

IBD Live: UnitedHealth Stock Actionable, Tesla Stock On Fire

After breaking out past the 268.79 buy point last December, UnitedHealth stock remains a classic Long Term Leader on Leaderboard. Shares of UnitedHealth stock are nearly extended past the 5% buy zone which tops out just above the stock’s closing price on Tuesday of 300.53. However the 300 price level itself offers an alternative entry.

“After breaking through the 300 price level, a psychological price level, I think it’s totally actionable right here,” said Mike Webster. “UnitedHealth stock’s most recent earnings are behind us now, which takes a huge risk of the table. Also, you have many potential exit points that are close by so you’re not taking a huge amount of risk.”

Tesla stock surged 7.2% on Tuesday to 547.20, hitting a fresh all-time high. That’s quite a move from IBD’s original 361.30 buy point. Shares of Tesla reached the 20% profit taking zone within just three weeks of the initial breakout back in December. The position remains a half position on Leaderboard. Given that shares are well extended from the breakout, the IBD Live Team agrees that Tesla stock is no longer actionable at these levels.

Get Daily Trade Ideas And Top Stocks To Buy And Watch

If you’re looking for the next top stocks primed to make big moves, check out IBD Live, our daily livestream on the stock market today.

IBD Live is an interactive broadcast where our stock pickers, analysts and portfolio managers watch the market action and discuss the day’s top trade ideas. Listen to their conversations, see their screens and ask them questions — all in real time!

The next episode is Wednesday starting at 9:20 a.m. ET and running through the first hour of trading. Tune in for more actionable setups and market commentary.

News Team by — January 22, 2020 By News Team in Markets
8 Stocks To Buy With Dividend Yields Of At Least 9%

In an unpredictable market, dividend and distribution payments are one of the few things investors can reliably count on. Unfortunately, many stocks that have the highest dividend yields come with a catch. When a stock drops, dividend yields rise given they are calculated as a percentage of share price.

In other words, some stocks with the highest yields may be the worst investments. In addition, when businesses are struggling, dividend cuts can be one way to stop the bleeding. Fortunately, there are plenty of stocks out there with generous dividend or distributions yields that analysts see as good investments as well.

Here are eight stocks to buy with at least 9% yields, according to Bank of America.

TCG BDC Inc (NASDAQ: CGBD)

TCG is a business development company, a type of closed-end investment company that invests in small and mid-sized businesses. By law, BDCs must distribute at least 90% of their profits to investors, producing some extremely high yields.

Analyst Derek Hewett says TCG is one of the top BDC investments given the company’s track record of strong execution and profitability. In addition, Hewett has said TCG is well-positioned in late-cycle investments and has a lower yield, lower risk strategy than many of its BDC peers. TCG has a 10.5% yield.

Bank of America has a Buy rating and $14.50 price target for TCG stock.

Hoegh LNG Partners LP (NYSE: HMLP)

Hoegh is a master limited partnership, another special class of investment that often has high yields but has special tax implications as well. Hoegh is a liquid natural gas storage and shipping vessel operator.

Analyst Ken Hoexter recently said Hoegh’s distribution covered bounced back to 1.2 times in the most recent quarter after temporarily dipping to 0.9 times. The rebound reassured investors the company can maintain its distributions at their current level heading into 2020. Hoexter says the company’s fleet has a remaining charter duration of greater than 10 years, which should create a stable environment for distribution growth. Hoegh has a 10.8% yield.

Bank of America has a Buy rating and $18 price target for HMLP stock.

See Also: 12 Dow Stocks With At Least 2% Dividend Yields

Energy Transfer LP Unit (NYSE: ET)

Energy Transfer owns more than 83,000 miles of pipelines used for transporting natural gas, natural gas liquids and crude oil. After recently meeting with company management, analyst Ujjwal Pradhan said the company has a clear vision for the near-term.

First, it’s prioritizing capital spending, including a potential buyback plan. Second, it is building a high-quality growth project backlog for the next two years. Pradhan said Energy Transfer has attractive growth opportunities and an improving credit profile and it deserves a higher earnings multiple than its peer group. Energy Transfer has a 9% yield.

Bank of America has a Buy rating and $20 price target for ET stock.

MPLX LP (NYSE: MPLX)

MPLX is another MLP that specializes in oil and natural gas transport. Shares have lagged the market in recent months after the company announced a review of its midstream operations.

Pradhan said earlier this month investors should get clarity on the plan sometime in the first quarter, including the possible full separation of the midstream business. While uncertainty about the review outcome has weighed on the stock price, Pradhan says the company will likely report solid underlying fourth-quarter results and 2020 guidance. MPLX has a 10.2% yield.

Bank of America has a Buy rating and $32 price target for MPLX stock.

BlackRock TCP Capital Corp (NASDAQ: TCPC)

BlackRock TCP Capital is a BDC that is focused on investing in the debt of unrated, middle-market companies with enterprise values ranging from $100 million to $1.5 billion. TCP Capital has a 10.2% yield.

Hewett recently said TCP Capital deserves to trade at a valuation premium to its peer group given management’s long-term track record of managing risk, generating impressive returns and utilizing leverage to boost EPS. In addition, he said the company’s affiliation with BlackRock should benefit its balance sheet.

Bank of America has a Buy rating and $15 price target for TCPC stock.

VEON Ltd (NASDAQ: VEON)

VEON is a global telecommunications company with more than 200 million customers in 10 different countries, including Russia, Kazakhstan and Ukraine.

Analyst Cesar Tiron recently met with VEON management and said the company has several key issues it is addressing in the near-term. He said management is planning to shore up its Russia operations and focus on digital operations and mobile payments in Pakistan. Tiron said VEON is attractively priced, is a potential turnaround story and pays investors generously for their patience. VEON has an 11.2% yield.

Bank of America has a Buy rating and $3.60 price target for VEON stock.

Vermilion Energy Inc (NYSE: VET)

Vermillion is an oil & gas exploration and production company with a diversified property portfolio of land in Canada, France, the Netherlands and other countries.

Analyst Asit Sen recently said Vermillion’s combination of its high yield and its differentiated business model is a good recipe for investors. Sen said Vermillion is diversified geographically and its business is diversified within the oil & gas business as well. Th company has a long track record of consistent production growth, has a strong project backlog and pays a world-class yield with low financial leverage and a low payout ratio.

Vermillion has a Buy rating and $19 price target for VET stock.

Western Asset Mortgage Capital Corp (NYSE: WMC)

Western Asset Mortgage is a real estate investment trust that invests primarily in agency mortgage-backed securities.

Investors may be leery of mortgage investments after the last financial crisis, but Hewett recently said Western Asset Mortgage should continue to produce an impressive total return for investors in 2020. Hewett said the company’s portfolio isn’t as sensitive to interest rates as some of its competitors. In addition, he said the REIT deserves a premium valuation given its superior returns over the past couple of years. Wester Asset Mortgage has an 11.7% yield.

Bank of America has a Buy rating and $10.50 price target for WMC stock.

News Team by — January 22, 2020 By News Team in Markets
The Next $1 Trillion Stock After Microsoft, Apple, Alphabet Is …

Three S&P 500 stocks joined the trillion-dollar club: Microsoft (MSFT), Apple (AAPL) and now Alphabet (GOOGL). Analysts think they know which stock will be next.

Who’s next to join this prestigious club? Analysts are betting on Amazon.com (AMZN). The titan of the consumer discretionary sector is already valued at $924.5 billion. That’s based on the company’s closing price of 1,864.72 a share.

And analysts think the company’s shares will hit 2,177.96 a share in 12 months, says S&P Global Market Intelligence. If Amazon hits that target the company would be worth $1.1 trillion. Amazon would be the fourth S&P 500 stock to be worth $1 trillion, after Google parent Alphabet did it last week.

To be fair, analysts have been calling for Amazon to hit $1 trillion before. And Amazon’s market value got close to $1 trillion on July 16, 2019 when it hit $995 billion. But instead, the shares have faltered.

Shares of Amazon are up just 10.1% over the past year. That gain pales next to the other megacaps. Apple, Microsoft and Alphabet are up 105%, 58% and 35% over the past 12 months, respectively.

But does the trillion-dollar designation matter anyway?

S&P 500: Market Values Sway Indexes

Stocks’ market values offer more than just bragging rights. Market value is the most common measure used to determine the weight of individual stocks in index mutual funds and ETFs.

Market values, for instance, determine how much the SPDR S&P 500 ETF Trust (SPY) holds in Microsoft vs. Amazon. The market value of stocks also determines how much many index funds are weighted toward specific sectors.

For instance, largely due to its large market value members, the information technology sector holds a 23.8% weighting in SPY stock. That’s more than any other of the 11 S&P 500 sectors. Amazon’s consumer discretionary sector only accounts for 9.7% of the SPDR S&P 500 ETF Trust. That’s fourth behind tech, health care and financials.

The Big Four Pull Way Ahead

Microsoft, Apple, Alphabet and Amazon are so far ahead — no one else is even close to a trillion.

Social media darling Facebook (FB) is held out as a contender, but $1 trillion is miles away. The communications services company is worth just $633 billion. And that’s after jumping 50% the past 12 months to 222.14.

Analysts think Facebook stock will trade for 240.77 a share in 12 months. If accurate, that’s 8% upside for the stock. But even if analysts are right, that would lift Facebook’s market value to just $686 billion.

And financial Berkshire Hathaway (BRKA) and tech Visa (V) are even further behind with current market values of $562.5 billion and $441.1 billion, respectively.

Amazon: Looking At The S&P 500 Stock’s Future

The question is whether or not Amazon can regain its mojo enough to hit $1 trillion.

Analysts are optimistic about Amazon. The company’s revenue is seen hitting $279.2 billion in 2019. If correct, that would be 20% top-line growth.

But the bottom line is less impressive. Analysts are calling Amazon to make $20.67 a share on an adjusted basis in 2019. That’s up just 2.6% from 2018. Amazon is expected to report 2019 results on Jan. 30.

Additionally, Amazon reported adjusted earnings of $4.23 per share in the third quarter, missing expectations of $4.62. That was down 26% from the year-ago period, its first quarterly decline in nine quarters, as Amazon invested heavily in one-day shipping services.

It was also the second-straight quarter Amazon fell short of analysts’ earnings forecasts.

Amazon stock is currently not a buy.

The stock hit a 52-week high on July 11, then downshifted into a failed breakout. From that high point, Amazon stock is down about 7%. But Amazon is building the right side of a new base and trades above its 200-day and 50-day moving averages. The buy point is 2,035.10.

But all eyes are on $1 trillion.

News Team by — January 22, 2020 By News Team in Markets
Weekly Market Review – January 18, 2020

Stock Markets

What analysts call better-than-expected economic data, encouraging corporate earnings from U.S. banks, and the signing of the “phase-one” trade agreement helped raise U.S. stocks to fresh record highs last week. A surge in housing starts bolstered by strong retail sales point to a resilient consumer that is supported by a continued strong labor market. The “phase-one” trade agreement between the U.S. and China was formally signed last week, fulfilling expectations for a deal that was already done. Important terms of the deal included commitments from China to increase purchases by $200 billion over the next two years ($78 billion of manufactured goods, $52 billion in energy, $32 billion of agricultural products, and $38 billion in services). Analysts agree that the agreement removes significant uncertainty, however, they say trade issues will likely continue as a source of volatility through 2020.

U.S. Economy

The closing of stocks at record highs last week was driven by the U.S. and China reaching the “phase-one” trade agreement. Analysts believe the recent trade agreement is a significant step in the de-escalation of the trade tensions between the two superpowers. It takes away much of the threat that new tariffs create and creates confidence that a more comprehensive deal is achievable. Still, tariffs remain in place on two-thirds of U.S. imports from China. So, attention now shifts to implementation and enforcement. Potential failure to meet the terms of the deal could create temporary setbacks which could stretch as far as additional new tariffs. Further tariff relief and more complete trade cohesiveness that would include including structural fundamentals, like industrial subsidies, is likely to be in place by the time we reach the U.S. election. The current agreement gets rid of significant uncertainty, but all agree that trade issues will likely create some volatility in the coming year. Analysts expect stocks to continue to rise but at a slower pace than they have over the past decade. This is widely supported by ongoing economic growth, modest earnings growth, and accommodative central banks.

Metals and Mining

The precious metals sector was two sided this week, with gold and silver remaining in a channel, while both platinum and palladium climbed. Platinum was up 4.4 percent from last week, exceeding US$1,000 per ounce for the first time in two years. The precious metal had been sidelined for much of the growth that palladium and gold experienced in 2019. Now it’s starting to see a benefit from the same motivators that drove those metals. Rallying from US$976 (January 10) to US$1,037 (January 16), Platinum exhibited its best performance year-to-date. It is on track to surge to highs not experienced since 2015. The phase one trade deal between China and the US countered some of the volatility that entered the market earlier in this month. The exchange traded-funds sector (ETF) may help motivate the platinum’s price too, since last year, platinum ETFs grew by 12 percent with investors purchasing 90,000 ounces or 11 percent of global supply. Easing geopolitical tensions moved against gold’s momentum, putting it on course to record its weakest performance in nearly two months. News of the phase one deal pushed gold below US$1,550 only to rebound supported from a weaker equity market and lower US dollar. Another round of increased buying from central banks and monetary policy are also projected to impact the value of gold in 2020. Palladium continued its upward trend this week. The precious metal star climbed 14 percent to trade at an all-time high of US$2,429 on January 17. Palladium’s hyperbolic performance has now moved the industrial metal beyond platinum and gold’s record highs, making it the most valuable of the four exchange-traded precious metals. The German bank pointed to the prolonged supply deficit as the current catalyst behind palladium’s best historic performance. Like gold, silver remained locked in a range staying below US$18 an ounce for much of the week. Silver has exhibited the poorest price growth of all four precious metals. It ended the week without any gains.

Energy and Oil

As expected, China has been the key oil price driver this week. The phase one trade deal drove prices higher before worrying economic data from the country dragged prices lower. Oil prices regained a bit of ground by week’s end. That was based on optimism surrounding the Phase 1 U.S.-China trade deal only. The global oil market managed to dodge a bullet after the U.S. and Iran backed away from war talk and eased tensions. But the geopolitical risk has not disappeared. In any case, non-OPEC oil supply is expected to continue to grow faster than demand this year. Once again that leaves the market with a persistent supply surplus, according to the IEA. The result is tremendous pressure on OPEC+, which may find that it needs to cut even further than current levels. In the U.S. Permian basin, the industry is suffering through bankruptcies, slower growth and investor scrutiny. Many analysts suggest that production should grow this year, however skeptical investors are starting to see a potential for peak in supply over the near-term period. Natural gas spot price movements were mixed this week. The Henry Hub spot price fell from $2.08 per million British thermal units (MMBtu) last week to $1.98/MMBtu this week. At the New York Mercantile Exchange (Nymex), the price of the February 2020 contract decreased 2¢, from $2.141/MMBtu last week to $2.120/MMBtu this week. The price of the 12-month strip averaging February 2020 through January 2021 futures contracts declined 3¢/MMBtu to $2.290/MMBtu.

World Markets

Stock in Europe rose this week as trade tensions eased, and investors welcomed strong Chinese economic data. The pan-European STOXX Europe 600 Index ended the week 1.33% higher, and the UK’s FTSE 100 Index gained 1.30%. Germany’s DAX Index advanced 0.3%. For the UK, poor economic data, combined with recent dovish speeches and comments by Bank of England (BoE) Monetary Policy Committee (MPC) members, set speculation in motion that an interest rate cut is in the cards at the January 30 policy meeting. What was suggested as a quarter-point reduction in the benchmark Bank Rate, from 0.75% to 0.50%, just rose to 80% on expectations.  Analysts see rate cut as a form of insurance given the sharp slowdown at the end of the year. This move that probably should have occurred at the end of 2019 but was weigh laid by the general election. Analysts also expect data to begin improving as uncertainty has receded since the Conservative Party election victory, so purchasing managers’ surveys of the construction, manufacturing, and services sectors, will still be key to policymakers’ voting intentions.

China’s stock market moved slowly ahead of the signing of the phase one trade deal with the U.S. and did not rebound after the announcement. The Shanghai Composite lost 0.8% during the week while the CSI 300 large-cap index edged down 1.2%. The trade deal was already baked into the market came largely as expected. Many observers in the region viewed the deal as driven primarily by U.S. election politics and as a band-aid rather than a solution. For its part, China has pledged to import much more from the U.S.  There are worries that the target of a USD 200 billion increase in imports of goods and services from the U.S. over the next two years may be very difficult to achieve and could fall short. Regional skeptics also doubt China’s claim that other countries will not suffer as it redirects purchases back to the U.S.

The Week Ahead

U.S. markets will be closed on Monday to observe Martin Luther King Jr. day. Important economic data being released include pending home sales, the leading index on, and the Markit Purchasing Managers’ Index on Friday. This is an important week in the corporate earnings season as another 43 companies of the S&P 500 will be reporting fourth-quarter earnings.

Key Topics to Watch

  • Chicago Fed national index
  • Existing home sales
  • Weekly jobless claims
  • Leading economic indicators
  • Markit manufacturing PMI (flash)
  • Markit services PMI (flash)

Markets Index Wrap Up

News Team by — January 19, 2020 By News Team in Uncategorized
Physicists design ‘super-human’ red blood cells to deliver drugs to specific targets within the body

A team of physicists from McMaster University has developed a process to modify red blood cells so they can be used to distribute drugs throughout the body, which could specifically target infections or treat catastrophic diseases such as cancer or Alzheimer’s.

The modified red blood cells are designed to circulate in the body for several weeks at a time, seeking out specific targets including bacteria, tumors or organs.

The technology, described in the online edition of the journal Advanced Biosystems, solves a major problem with current drug delivery methods that use synthetic molecules and cannot reach specific targets or are rejected by the body.

“We call these super-human red blood cells. We think that they could work as the perfect stealth drug carriers which can outsmart our immune system,” explains Maikel Rheinstädter, a senior advisor on the study and professor in the Department of Physics & Astronomy at McMaster.

The researchers have developed a method to open up the red blood cell, modify its outer cell wall, and replace its contents with a drug molecule, which would then be injected back into the body.

The hybrid appears and behaves as a normal red blood cell, but has a sticky surface which can attach itself to bacteria, for example, open up and release antibiotics exactly where they are needed.

“We have combined synthetic material with biological material and created a new structure, which has never been done before in this way,” says Sebastian Himbert, lead author and a graduate student in the Department of Physics & Astronomy at McMaster.

“The entire process is very efficient and can be completed in one day in the lab,” he says.

Researchers believe this targeted delivery method could help to minimize dosages and therefore, potential side effects. This is particularly important for very potent drugs used in cancer and Alzheimer’s disease, and the treatment of infections of potentially resistant bacteria.

News Team by — January 17, 2020 By News Team in Global News
2 Top Growth Stocks to Buy in January

Every portfolio can benefit from a growth stock or two. Whether you’re in your 20s or enjoying retirement, tapping into businesses that are growing much faster than the broader market can help to make your hard-earned money go even further. That doesn’t mean you should go all-in on risky companies that promise (and often fail) to change the world or pretend that you’re a venture capitalist with cash to burn on early-stage endeavors. But identifying even a handful of solid, fast-growing companies can make or break your portfolio’s returns.

There’s no shortage of companies or industries to investigate, but to kick off 2020, I think investors should focus on perennial heartbreaker Incyte (NASDAQ:INCY) and relative newcomer Axsome Therapeutics (NASDAQ:AXSM). Here’s why these two pharma stocks are worth a closer look in January.

Should opportunistic investors move in?

What are the chances that six late-stage drug candidates all fail registrational trials? If you’ve been an Incyte shareholder long enough, then you might be cynical enough to think that’s a rhetorical question. Seriously, though, this pharma stock’s recent tumble has been a little exaggerated. 

In the first few days of 2020, investors ran for the exits when Incyte announced disappointing results from a registrational study. A combination therapy comprising itacitinib, the company’s drug candidate, and corticosteroids failed to meet the primary and secondary endpoints in a phase 3 study in graft-versus-host disease (GVHD). All patients in the study were treatment-naive, meaning they had not received prior treatment. 

The failure stung for two reasons. First, it immediately reminded investors of past high-profile clinical failures from Incyte and reset any optimism for upcoming data readouts from other parts of the late-stage pipeline. Second, analysts had expected the GVHD portfolio of Incyte to have peak annual sales potential of up to $925 million. 

Despite the disappointing results, the stock’s tumble can certainly be called an overreaction. This time around really is different for Incyte for two reasons: a strong pipeline and comfortably profitable operations.

Consider that the company has five more drug candidates in various stages of development. That includes ruxolitinib in GVHD patients who don’t respond to steroids, which delivered promising results in a phase 2 study in late 2019. There’s also the oncology asset pemigatinib, which should earn approval in cholangiocarcinoma in 2020. That rare cancer represents a relatively small opportunity, but early results suggest that the small molecule inhibitor could be the best in its class for treating certain genetically defined cases of bladder cancer. That could be a multibillion-dollar opportunity.

Incyte is also developing a cream containing ruxolitinib as a treatment for atopic dermatitis and vitiligo. Early results suggest that could be a winning indication, with Morningstar analyst Karen Andersen penciling in a 60% probability of generating $1 billion in annual revenue by its 10th year on the market — assuming it earns regulatory approval after completing clinical trials.

Investors shouldn’t make excuses for Incyte — it absolutely needs to earn Food and Drug Administration (FDA) marketing approval for one or two late-stage assets to justify its market valuation. But the business is also comfortably profitable. In the first nine months of 2019, it reported operating income of $307 million and operating cash flow of $579 million, marking year-over-year increases of 549% and 129%, respectively. The third-quarter surge in operating income should help to change the narrative that the stock is too expensive. It certainly changed my mind.

Strong financial performance provides a great foundation from which to fund any potential market launches for new assets in the coming years. It should also help to lower the stock’s valuation metrics, which could lower the anxiety levels of investors. Simply put, Incyte is making the most of its only drug product and has a promising batch of pipeline assets to pin its hopes on — even if past and recent failures make some hardened investors a little cynical.

Is this stock just getting started?

Shares of Axsome Therapeutics erupted for a 3,578% gain in 2019. The company emerged from obscurity with promising midstage results for AXS-05, a drug candidate being developed to treat depressive disorders. It earned Breakthrough Therapy designation from the FDA and later met all endpoints in a phase 3 trial.

Given the unique mechanism of action and simple formulation of AXS-05 (a combination of a cough suppressant drug and a smoking cessation drug), it could compete well against selective serotonin re-uptake inhibitors (SSRIs) that dominate treatment today. With the large need for better depression treatments, the drug candidate is likely to top $1 billion in peak annual revenue.

After all, analysts had previously expected a drug candidate from Sage Therapeutics to top $2 billion in peak annual sales as a non-SSRI treatment option for depressive disorders, but that experimental treatment failed its registrational study.

That alone makes the $3.2 billion valuation of Axsome Therapeutics pretty attractive for investors with a long-term mindset, but there’s more in the company’s pipeline. Perhaps the next most-promising drug candidate is AXS-07, which is being developed as a treatment for migraine. In a recently concluded phase 3 trial, the drug candidate met both primary endpoints, which measured its ability to relieve pain symptoms compared with placebo.

More important, AXS-07 met key secondary endpoints when tested head-to-head against rizatriptan, which is a standard migraine treatment. A recent survey of physicians who collectively treat 50,000 migraine patients found that 37% would prescribe AXS-07 if it bested placebo, but 90% would recommend the drug candidate if it proved superior to rizatriptan.

Axsome Therapeutics expects to file new drug applications for AXS-05 and AXS-07 in the second half of 2020, which means approval and market launch milestones won’t occur until 2021 or early 2022. Nonetheless, those two drug candidates alone could support a market valuation well above the current $3.2 billion level.

News Team by — January 17, 2020 By News Team in Markets
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