Key points
- Stocks have lost ground this week as investors now believe interest rates will stay high for longer.
- Rising oil prices will reignite inflation and likely cause companies to lower their profit forecasts.
- A hotter-than-expected jobs report to end the week is another reason why investors shouldn’t count on rate cuts in the near future.
- 5 stocks we like better than Snowflake
Stocks lost ground this week as investors found themselves grappling with interest rates that will remain high for longer. This sentiment was confirmed by Federal Reserve Chairman Jerome Powell, who continues to say that rate cuts are coming, but is noncommittal about when those cuts will happen.
One of the culprits is oil. Crude prices rose above $85 a barrel as tensions in the Middle East increased. Oil prices have a lagged effect on corporate earnings, meaning companies could reevaluate their earnings outlook when earnings season begins next week. If companies start reporting a decline in profits, this could lead to a continued sell-off.
In contrast, the March jobs report was hotter than expected, with 303,000 jobs created during the month. Another surprise, the unemployment rate fell to 3.8%.
The market continues to surprise investors, and the MarketBeat team is committed to tracking the stocks and news that move the markets. Here are some of the top stories this week.
Articles by Jea Yu
One way to take advantage of the current wave of artificial intelligence (AI) is to examine the infrastructure needed to make AI applications possible. One such area is data centers. This week Jea Yu watched two manufacturers of data storage devicescountries experiencing growing demand that shows no signs of slowing down.
Focusing on AI is what investors are Snowflake Inc. NASDAQ: SNOW which we want to see after the company issued soft guidance in its most recent quarter. However, Yu explains why Snowflake’s new CEO, who just Alphabet Inc. NASDAQ:GOOGL, seems to be the right candidate to lead the company into the AI era. And the new CEO recently increased its stake in the company to the tune of $5 million.
Yu also wrote about soaring Viking Therapeutics Inc. NASDAQ:VKTX following positive news on company’s GLP-1 pill. The company’s candidate, which is in clinical trials, shows comparable weight loss benefits, with less severe and more tolerable side effects, which are a major barrier to currently available GLP-1 treatments.
Articles by Thomas Hughes
In news that can best be summed up as “another one that bites the dust,” electric vehicle (EV) maker Canoo inc. NASDAQ:GOEV issued a business continuity notice. The company is short of cash and has struggled to raise more capital in a market with higher interest rates. Thomas Hughes breaks down Canoo’s situation and offers a different electric vehicle company to investors still interested in Canoo’s utility vehicle niche.
As earnings season begins, technological stocks are still a popular choice with investors. And, due to some price revisions, several titles are trading at much better valuations. With this in mind, Hughes emphasizes five tech stocks investors should consider before the start of the results season.
For investors looking to eliminate some risk, Hughes considered five cheap dividend stocks. This doesn’t just mean the shares are affordable; they are also likely to give investors a chance for outsized stock price gains in addition to a growing dividend.
Articles by Sam Quirke
From time to time, quality stocks experience downward moves that are difficult to explain. Sam Quirke explains why this was the case with Advanced Micro Devices Inc. NASDAQ:AMD. After a strong first quarter, the stock fell sharply and deviated from its sector and the market as a whole. However, analysts remain bullish on AMD stock, which could pave the way for a massive comeback rally.
Among beauty values, Estée Lauder Companies Inc. NYSE:EL was left behind competitors such as Ulta Beauty Inc. NASDAQ:ULTA. EL stock is down 70% from its 2022 highs. However, the stock has not only shown signs of a bottom, but it is also falling. many analyst upgrades that could push the stock higher.
If you are a contrarian trader, Quirke has stocks with a high relative strength indicator (RSI) that may be worth considering. While many investors see an RSI above 70 as a reason to sell, Quirke points out three high RSI stocks this always gives investors reason to believe they could go higher.
Articles by Chris Markoch
One of the major stories of the week was the news that Tesla Inc. NASDAQ:TSLA analysts’ expectations for deliveries were not met in the first quarter, by a wide margin. Chris Markoch explains why this mistake continues to highlight the company’s weakness in China and weak demand for electric vehicles in the United States. The bottom line is that unless the company delivers a surprise in its earnings report, TSLA stock could fall further.
Articles by Ryan Hasson
Sometimes the best offense is a good defense. In investing terms, this means using existing economic conditions to buy stocks in defensive sectors. Ryan Hasson signals to investors a continued rotation into defensive sectors. This encourages institutional investors to buy shares of the four oversold large-cap stocks that Hasson analyzes.
Another way to play defense in this market is to use gold. The yellow metal is one of the best performing asset classes in 2024 and will likely continue to outperform. This is why Hasson analyzes five mining stocks which give investors a way to invest in the strength of gold without the worry of owning the physical metal.
However, there are also times when you need to invest in the economy that exists, not the one you think should exist. As Hasson writes, consumer spending is on the rise and that’s why investors should consider buying stocks in the sector. Consumer Discretionary Select SPDR ETF NYSE: XLY to get exposure to the biggest names without picking individual stocks.
Articles by Gabriel Osorio-Mazilli
Gabriel Osorio-Mazilli also wrote about consumer discretionary stocks. Except in this case he cited three specific names to buy as consumer confidence is at its highest level since 2001.
Energy stocks were the big winners from the rise in oil prices. However, Osorio-Mazilli reminds investors why they should not forget about the natural gas market. And particularly, the underestimated natural gas stock that institutions make large purchases.
And, as usual, bank stocks will be the first to report results when earnings season begins next week. As has been the case for over a year, investors will be paying close attention to the commercial banking sector. Osorio-Mazilli proposes two commercial bank stocks that analysts love as earnings season approaches.
Before you consider Snowflake, 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 Snowflake wasn’t on the list.
Although Snowflake currently enjoys a “Moderate Buy” rating among analysts, top-rated analysts believe these five stocks are Better Buys.
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