Cover story: “After a gloomy 2018, Wall Street strategists are upbeat about the market’s prospects next year, given a growing economy, low interest rates, and a possible truce on trade,” and U.S. stock could rise by more than 10 percent, according to a Barron’s panel of market strategists.
Tech Trader: Column looks at three opportunities in the tech sector for 2019: Cloud computing chips (INTC), artificial intelligence (GOOGL), and digital commerce (PYPL, GRUB).
Trader: “Peak everything” isn't a problem as long as the market sees continued earnings growth, profit margins, and positive confidence indicators, all signs the economy remains strong, according to Julian Emanuel of BTIG; A report from HSBC groups risk into three categories: event risk, market risk, and liquidity risk, all of which are driving the current market volatility, though investors also need to worry about other things; +/- XPO: A report by short seller Ben Axler claims the company, one of the year’s best-performing transport stocks, has used aggressive accounting to hide poor returns on its growth-by-acquisition strategy.
Interview: Liz Ann Sonders of SCHW talks about where investors should brace for a bear market, what her favorite indicators are signaling, and risks to which investors may not be paying attention.
Features: 1) Barron’s list of the top 10 stocks for 2019 includes GOOGL, AAPL, BAC, BLK, CAT, CVX, DAI, DAL, ET, and TOL; The list “tilts toward more economically sensitive issues and value,” and value investors could see some of the best opportunities in years; Most of the picks trade for 10 times forward earnings or less; 2) Growing cost pressures and concerns about slowing growth have led many investors to lose faith in small-caps, so investors will have to be choosy and avoid simply buying the index—2019 could be the year for stock pickers; 3) As rates rise, so do borrowing costs, which could create problems for companies with large debt loads—and just because some businesses aren’t feeling pressure now doesn’t mean they won’t at some point next year; 4) Investors in target-date funds are wondering what went wrong this year, but should think twice if they’re tempted to sell—losses may be due to an unusual confluence of events, and the funds are designed to be long-term savings vehicles.
European Trader: Stocks in the U.K., France, and Germany weren’t much of a bargain for investors in 2018, but the problems they face are likely to dissipate, shares are inexpensive, and central bank monetary policies will remain supportive (Positive on Rehinmetall, Accor, B&M European Value Retail).
Emerging Markets: Emerging market stocks didn’t change much over 2018, but they are growing twice as fast as those in developed countries, and economic management is solid in most countries, with inflation near historic lows (Positive on BABA, Tencent, PAGS, MELI, HDB, Kotak Mahindra, NTES, ATHM, VALE).
Commodities: Some laggards in 2018, including gold, copper, corn, and soybeans, could become leaders in the commodity sector in 2019 as new opportunities arise because of the U.S.-China trade war and other global events.
Streetwise: The uncertainty around Britain’s future after the Brexit isn’t likely to be resolved much before the March 29 deadline, and though prime minister Theresa May’s deal is flawed and unpopular, it may be the best the U.K. can get.