It could be time to buy the dip on these stocks - Bank of America 😍
Wednesday, 26th January 2022 by Gotrade
Hey Gotraders,
Up, down, up, down. That seems to be how the stock market has been moving lately. It’s been a turbulent ride for sure as markets remain volatile!
In focus this week is the Federal Reserve’s January meeting. Investors are expecting the Central Bank to tighten monetary policy and signal a rate hike as soon as March.
"Market volatility remains elevated as investors are still feeling jittery over a potentially aggressive Fed" - OANDA's Edward Moya.
Here’s how the markets performed yesterday:
Dow Jones: -0.19%
Nasdaq Composite: -2.28%
S&P 500: -1.22%
According to Bank of America (BAC), it could be time to buy the dip on some strong and stable stocks. Let’s take a look at stocks that they recommend:
Applied Materials (AMAT)
Broadcom (AVGO)
Carmax (KMX)
D.R. Horton (DHI)
Home Depot (HD)
Lam Research (LRCX)
Lowe’s (LOW)
Monster (MNST)
Penn National Gaming (PENN)
Pfizer (PFE)
“We screen for Buy-rated stocks that have underperformed the S&P 500 [year-to-date], offer higher Free Cash Flow to Enterprise Value (FCF/EV) vs. sector peers, and stocks that fail to exhibit statistically strong relationships with rates and are labor-light relative to sector peers” - Savita Subramanian, Equity and Quant Strategist at Bank of America.
Invest safely and wisely!
📈 Microsoft spurs relief rally 💪
Right before its earnings call, Microsoft’s (MSFT) shares were down exactly 20% from its November peak, and headed for its worst month since 2010.
Microsoft reported earnings that beat analysts’ expectations on both the top and bottom lines, but stock fell a further 5% in extended trading. It took Microsoft’s upbeat third-quarter guidance to calm investors. Stock reversed direction and turned positive in after-hours trading.
“The solid and robust Microsoft guide should be front and center tomorrow morning, and that should help calm Wall Street’s tech growth worries… Microsoft’s report reminds investors that there are two distinct categories in tech - those with healthy free cash flow and those that are speculative” - David Wagner, Portfolio Manager at Aptus Capital Advisor.
Another analyst Daniel Ives from Wedbush Securities also goes on to say "In this jittery market we will see every tech print initially viewed as glass half empty, but ultimately this remains a core cloud name to own and we believe is in oversold territory."
Shares of Microsoft closed at $288.49, down 2.66% for the day. Shares are up 3.93% in extended trading at the time of writing.
📉 Innovation is on sale – Cathie Wood 🛒
Ark Innovations’ flagship fund, ARK Innovation ETF (ARKK) is down more than 55% from its February 2021 high of $156.58 per share. The ETF has lost more than half of its value in the past year.
But is Cathie Wood worried? No. Instead, she is using this opportunity to double down on tech stocks at hugely discounted prices! Cathie Wood is known for her unwavering conviction for investing in innovative companies that will disrupt our world.
“We do believe that innovation is on sale” - Cathie Wood.
ARK Innovation ETF closed at $70.80, down 27% year-to-date.
Top movers & shakers 🎢
What else is making headline news 📰
Wells Fargo (WFC) strategists say buy stocks after the latest selloff.
Wall Street ends down as markets whipsaw ahead of the Fed meeting.
Dogecoin pops 8% after Elon Musk says he'll eat a happy meal on TV if McDonald's (MCD) accepts the meme coin as payment.
How the current economy could drive more M&A activity, and where investors should look.
These are the 10 most talked-about stocks on Reddit's WallStreetBets forum.
Popular companies releasing earnings this week 💰
Wednesday: Tesla (TSLA), Abbott Labs (ABT), Intel (INTC), AT&T (T), Boeing (BA), Anthem (ANTM), ServiceNow (NOW), Automatic Data Processing (ADP), Lam Research (LRCX), Crown Castle (CCI), Edwards Lifesciences (EW), Norfolk Southern (NSC), Freeport-McMoRan (FCX), Progressive (PGR), General Dynamics (GD), Vertex Pharmaceuticals (VRTX), TE Connectivity (TEL), Kimberly Clark (KMB), Amphenol (APH), Xilinx (XLNX), Ameriprise Financial (AMP), Marina Bay Sands (LVS), Nasdaq (NDAQ), Corning (GLW), Hess (HES), Teradyne (TER), Seagate Technology (STX), United Rentals (URI), Duke Realty (DRE), Raymond James (RJF), Rollins (ROL), MarketAxess (MKTX), Whirlpool (WHR), Levi Strauss (LEVI)
Thursday: Apple (AAPL), Visa (V), Mastercard (MA), Comcast (CMCSA), Danaher (DHR), McDonald's (MCD), SAP (SAP), Stryker (SYK), Cadbury (MDLZ), Altria Group (MO), Marsh & McLennan (MMC), Blackstone Group (BX), HCA Healthcare (HCA), Atlassian (TEAM), Northrop Grumman (NOC), KLA (KLAC), Dow, Inc. (DOW), MSCI (MSCI), STMicroelectronics (STM), T. Rowe Price (TROW), Xcel Energy (XEL), Rockwell Automation (ROK), ResMed (RMD), Valero Energy (VLO), Arthur J Gallagher (AJG), Ball (BLL), Nucor (NUE), Southwest Airlines (LUV), McCormick (MKC), Dover (DOV), Tractor Supply (TSCO), Western Digital (WDC), Celanese (CE), Eastman Chemical (EMN), Textron (TXT), W.R. Berkley (WRB), A.O. Smith (AOS), Robert Half (RHI), Robinhood (HOOD), Western Alliance (WAL), Dolby Labs (DLB), Brunswick Corp (BC), JetBlue (JBLU)
Friday: Chevron (CVX), Charter Communications (CHTR), Caterpillar (CAT), Colgate (CL), Phillips 66 (PSX), LyondellBasell (LYB), VF Corp (VFC), Church & Dwight (CHD), Booz Allen (BAH), Autoliv (ALV)
A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.
The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.
That’s all from us for now.
Signing out,
Enjoyed the newsletter? 🤗
Why not share with your family or friends who may be interested in starting their investing journey. Simply forward this newsletter - all they got to do is click the “Subscribe Now” button below… Or they can get the Gotrade app - they’ll automatically become a subscriber.
The legal stuff 🤓
Disclaimer: Gotrade Securities, trading as Gotrade, provides this service as general information only, without taking into account your circumstances, needs, or objectives. You should consider the appropriateness of any forecast or other information herein for your individual situation. If in doubt, you should seek independent professional advice.
Gotrade utilizes financial information providers and information from such providers may form the basis for analysis. Gotrade accepts no responsibility for the accuracy or completeness of any information herein contained. Additionally, any third-party information provided therein does not reflect the views of Gotrade or any of their subsidiaries or affiliates. Opinions are the authors; not necessarily that of Gotrade Securities or any of its affiliates, subsidiaries, officers, or directors.
All investments involve risk and past performance does not guarantee future results or returns. There is always the potential of losing money when you invest in securities or other financial products. Gotrade Securities is licensed to carry on business as a Labuan Securities Licensee under the Labuan Financial Services and Securities Act 2010 (License No. SL/20/0014).