Cover story: The robo-advisory business is maturing, and it’s hard to underestimate the impact upstarts such as Betterment have had on wealth management; Firms such as SCHW, Fidelity, Merrill Lynch, AMTD, ETFC, GS, JPM, and MS are either already in the game or planning to get in.
1) Positive on C: Shares could rise by 50 percent, because the bank “offers the combination of a low valuation and what could be the highest earnings growth rate among its peers in the years to come”;
2) Positive on HON: Under new chief executive Darius Adamczyk, shares could return 15% during the next year, backed by a rising P/E ratio and the industrial giant’s big bet on software;
3) Positive on AAP: Shares of the auto-parts retailer are down on fears AMZN may disrupt the sector, but the stock’s valuation already takes into account bad news, and ignores the potential for a boost in profit margins and earnings;
4) Cautious on TWTR: Shares are nearly as expensive as those of FB, where revenue and profit are growing, meaning Twitter must improve its situation, be acquired, or suffer further stock declines—the most likely outcome.
Tech Trader: Cautious on GOOGL, AMZN: Alphabet has failed to diversity its business away from advertising, while Amazon faces political pressure over its dire effect on Main Street commerce; Investors should “take a breather on both these stocks despite the companies’ phenomenal achievements.”
Trader: June payroll data and AAPL’s earnings could shake up the market, though Ian Winer of Wedbush Securities says it “appears bulletproof”; Positive on UTX, LII, MMM, IR, BA, DE: The economic environment remains conducive for industrials, says Ed Yardeni of Yardeni Research, and the sector could continue to rally this year; Investors should be wary of merger deals made by companies under intense pressure to make structural changes to their businesses, some of which come with high price tags.
ETF Special Report: Choosing between active and passive funds doesn’t have to be an an all-or-nothing decision; certain funds are the best option for certain asset classes—bonds, for example, are best handled by an actively managed fund.
Follow-Up: Positive on FB: Though the social site may soon struggle to keep growing its ad-based business, likely by stealing business from AAPL, GOOGL, MSFT, and AMZN, shares could rise to $200 in a year, a 16% gain.
European Trader: Cautious on Ryanair: Carrier has done well for its investors, but as it sheds some of its no-frills elements, it could face growing pains as it pushes to reach 200M passengers, leading to a drop in share price.
Asian Trader: Reliance Industries’ launch of the low-price JioPhone will be a loss leader, but gives the company a foothold in a key sector in what will eventually be the world’s second-biggest economy.
Emerging Markets: “Emboldened after the failed coup one year ago and a referendum giving the president sweeping power this spring, Turkey’s government is drifting from democracy,” damping the economy.
Commodities: The natural-gas rally is slowing down, and the bull case rests on the fact the market has been undersupplied this year.
Streetwise: Story digs into three key questions for investors: Are crude-oil prices finally turning up? Are regulators breathing down the neck of big tech companies? Will the global arms race peak?