Key points
- Five key trends should be at the forefront of investors’ minds heading into the new quarter.
- From fundamental trends to sector-specific interests in the stock market, there are opportunities at every turn.
- Wall Street price targets and EPS projections support the upcoming capital rotation.
- 5 stocks we like in Taiwan Semiconductor Manufacturing
Global financial markets are like a machine, and each asset class acts like a cog that turns and turns with each cycle. Today, there are a few key trends that investors should be aware of before the end of the quarter to help them think about the best themes to grow their wealth.
Each step in building the machine contains concrete steps for investors to track and rotate a portion of their capital in and out of the respective asset classes. Broader market participants and even Wall Street analysts are aware of these trends, which could start with the Federal Reserve’s potential push to cut interest rates this year.
Since the price of silver is generally determined by interest rates, a reasonable first step for investors is to consider where commodities (priced in U.S. dollars) might be heading and how everything else might follow. For this first step, consider Hess Company. NYSE:IL. Oil’s new annual high could have an interesting effect on iShares 20+ Year Treasury Bond ETF NASDAQ:TLT.
Restarting the machine: oil and bonds
THE FedWatch tool At CME Group Inc. says traders have priced in these potential cuts by September 2024. Potentially lower interest rates could lower the value of the dollar index, pushing up the price of a barrel. Hitting a near nine-month high, oil trends may have priced in these declines by now.
Finding the right oil market could be perilous, so here’s what Wall Street likes. The integrated oil and gas industry is expected to grow its earnings per share (EPS) at an average rate of 11% this year. In contrast, Hess analysts believe Hess could exclude 32%.
Knowing that growth will be the priority in these uncertain times, Mizuho Financial Group Inc. raised its price target on Hess to $205 per share, calling for a 30% increase from current prices. More than that, The PNC Financial Services Group Inc.. bought up to $373,100 from Hess shares during the last quarter.
Hess shares trade at 94% off its 52-week high, the dynamic has therefore already started for energy stocks. Next come bonds, which have attracted few buyers to drive down their yields and reflect potential Fed cuts.
For this reason, the iShares bond ETF is trading at around $90 per share, a price not seen since 2011. Since bond prices move opposite to yields, investors could catch this ETF at a lower price cyclical and make it rise when the Fed throws in the towel. and reduced rates.
American manufacturing is at stake
With the dollar expected to fall, U.S. exports could become more attractive to foreign buyers. February ISM manufacturing PMI report recorded export orders up 6.4% from the previous month as the sector prepares for upcoming export activity.
The Japanese steel giant Japanese steel OTCMKTS: NISTFplaced a application in December 2023 redeem United States Steel Company. NYSE:X for $14.9 billion. Now that the Japanese yen is at a 30-year low against the dollar, buying an American manufacturing company seems like a cyclical choice.
Another name to remember is Entegris Inc. NASDAQ:ENTG. This one seeks to increase its EPS by 36% over the next 12 months, as part of the CHIPS and Science Act mission to manufacture semiconductors onshore in the United States
It’s all about the consumer
Now that American consumer confidence is at an all-time high highest in 3 years, stocks that enable consumer consumption could see a further rise. This time, names like Simon Real Estate Group Inc. NYSE:SPG offer dividends exceeding inflation to sponsor shareholders throughout this new cycle.
Even after growing 32% over the past year, Simon Property (a shopping center owner-operator) is still paying a Dividend yield of 5.3%. Additionally, its P/E valuation of 20.8x puts it more than 50% below the REIT (REIT) the industry multiple of 44.5x.
During the last quarter, Morgan Stanley And The Goldman Sachs Group Inc.. analysts increased their price targets on stocks. Despite stubborn inflation rates in the United States, the prospect of a potential rate cut excites investors. consumer discretionary game.
The race for AI
And who can remember the technological stocks take the indices to all-time highs? After wearing the crown for a while, Nvidia Co. NASDAQ:NVDA begins to raise questions about if its price is too high.
After allocating $11 billion to Taiwan Semiconductor Manufacturing Co. NYSE:TSMthe US government has inherently expressed its preference – and its confidence – for TSMC to carry out its plan of land-based semiconductor manufacturing.
TSMC is configured to increase its EPS by 24% this year, almost double the 13% expected for Nvidia. TSMC still trades at a P/E of 28.4x, 68% below Nvidia’s valuation of 75.4x.
Over the past 12 months, TSMC stock has underperformed Nvidia by as much as 173%, a gap that favored fundamentals and U.S. support could close.
Before you consider semiconductor manufacturing in Taiwan, you’ll want to hear this.
MarketBeat tracks Wall Street’s top-rated and top-performing research analysts daily and the stocks they recommend to their clients. MarketBeat identified the five actions that top analysts are quietly whispering to their clients to buy now before the entire market tanks…and Taiwan Semiconductor Manufacturing wasn’t on the list.
While Taiwan Semiconductor Manufacturing currently enjoys a “Moderate Buy” rating among analysts, top-rated analysts believe these five stocks are Better Buys.
What stocks are major institutional investors, including hedge funds and endowments, buying in today’s market? Click the link below and we’ll send you MarketBeat’s list of the thirteen stocks that institutional investors are buying ASAP.