Cover story: In the first installment of the Barron’s 2018 Roundtable, the panelists said they “generally expect more of the same in the months ahead—more gains for equities, large-cap and small” as economic growth continues; The Republican tax overhaul will help the economy and profits, prompting fresh investment as well as buybacks and more dividend payments.
Features: 1) Overview of Barron’s 2017 picks, which were up 8.1% from the date of publication to the end of the year, though they trailed their benchmarks; 2) Positive on Vivendi: As Spotify prepares to go public and streaming gains popularity, content providers such as Vivendi that receive royalties are on more solid footing than the streaming companies that pay them; 3) Driverless cars were a hot topic at CES, but while optimism about the market is growing among tech companies and consumers, numerous hurdles remain ( Positive on APTV, Lyft, BMW, GOOGL, TSLA, F, TM, GM, SNE, Kia, Nissan, Hyundai, Volkswagen); 4) MSFT co-founder Bill Gates says greater progress addressing developing world health problems could be made if pharma companies and startups were involved.
Tech Trader: Positive on QCOM: Company’s announcement at CES about new business in the radio frequency sector signals it plans to go on the offense against AVGO to thwart its takeover attempt, and that its business isn’t just about collecting royalties on phones.
Trader: Lori Calvasina of RBC Capital Markets and Julian Emanuel of BTIG expect the S&P 500 to hit 3000 by the end of the year; “The bond market’s brief selloff last week drew attention away from what might be the real issue: U.S. trade relations”; Positive on FB, AMZN, AAPL, NFLX, GOOGL: FAANG stocks seem more expensive than a year ago, and because they make up such a huge part of the S&P 500, any sustained weakness could be bad for the index and investors.
European Trader: Positive on Next: British retailer, which has about 700 stories selling clothes, shoes, and home furnishings, offers a good retail play for investors, though it remains heavily dependent on the U.K.
Asian Trader: Positive on Keyence: Japanese company, a key player in artificial intelligence and robotics, is among several cutting-edge tech-focused firms in Japan that are helping drive up the Nikkei 225.
Emerging Markets: Trade wars pose a potential problem for emerging market investors this year, but for now there is no reason to abandon the sector.
Commodities: Tightening global supplies and rising demand for crude oil helped prices start the year with a bang, and many analysts think they could rally to $80 a barrel.
Streetwise: “Tech’s deflationary powers—the ability to disrupt industries, increase efficiency, and lower prices—are the same ones driving a growing rebellion against tech,” says columnist Alex Eule, who also wonders why Jana Partners is targeting AAPL instead of FB, TWTR, SNAP, or GOOGL, which make the products that keep children tied to their phones.