SPONSORED 🔽

Politicians Loading Up on One U.S. Energy Stock 

Senator Ted Cruz, Bill Haggerty of Tennessee, Congressmen David Price, Patrick Fallon, Brian Babin, August Pfluger, Tom Malinowski, Pete Sessions… Both the GOP and the Dems are loading up on one stock.

Why? That’s the most interesting part.

Hello Stock Traders,

Let’s talk about Wall Street’s mood lately. It seems being bearish is like being the last one at the party – it’s just not where the action is. The stock market’s been inching towards new highs, and even the typically cautious folks, like Morgan Stanley’s Mike Wilson, are admitting things are looking up for equities. It’s almost like the market’s throwing a party, and everyone’s invited.

But before we break out the confetti, let’s consider a few things. Jonathan Krinsky from BTIG – who usually leans towards the bearish side – thinks the S&P 500 might hit 5,000 early in 2024. That’s quite a milestone, right? However, he’s not betting on a never-ending rally. If things take a turn, he’s eyeing support levels at 4,600 and even down to 4,200-4,300. It’s like he’s cautiously optimistic, but still keeping an umbrella handy just in case.

Now, here’s something intriguing. The CBOE VIX index, our go-to gauge for predicting market volatility, did a bit of a dance before Christmas, ticking up even as the market gained. Usually, they move in opposite directions. It’s like the market is smiling but has a nervous twitch.

Remember those jitters we saw in January 2018 and September 2020? Krinsky thinks we might be seeing a similar vibe now. Yet, investor sentiment seems pretty upbeat, with everyone seemingly jumping back into the game.

So, where does Krinsky think the smart money should go? Healthcare. Yep, you heard that right. It’s not the flashiest sector, but it’s been steady. Healthcare’s been cruising in a trading range for a while, and Krinsky reckons a breakout in 2024 could be big news. It’s like finding an underrated movie that turns out to be a blockbuster.

He’s particularly keen on smaller companies in healthcare. The Invesco S&P SmallCap Health Care ETF, for instance, is showing signs of breaking its downtrend against the big guys in the sector. It’s like the little engine that could, finally catching up.

Krinsky’s also got his eye on some specific stocks. Large caps like AbbVie, Danaher, and a few others have charts that look promising, even though they don’t have BTIG’s official thumbs up. And in the small-cap arena, names like Alkermes and Fortrea are catching his attention.

But wait, there’s more. He’s bullish on a bunch of companies in Biotech, MedTech, Life Sciences, and IT & Digital Health – like Ambrix Biopharma and Boston Scientific. These are the ones he thinks will make some noise in 2024.

Lastly, let’s talk Pfizer and Eli Lilly. Pfizer’s had a rough year, down significantly, but it’s now hovering around what Krinsky calls “major support.” It’s like it’s been knocked down but is ready to stand back up. Eli Lilly, on the other hand, seems to have had too much of a good thing, with a bit of a wobble in its momentum. It’s like that runner who’s been leading the race but is starting to feel the burn.

In a nutshell, 2024 could be the year healthcare stocks shine, especially the underdogs. It’s like betting on the quiet kid in class who turns out to be a genius. As investors, keeping an eye on these could add some healthy variety to our portfolios. And who knows? This ‘solid contrarian idea’ might just be the ticket to outperforming in a market that’s full of surprises.

–James

Up next: While REITs currently sizzle like hot property due to falling rates, the broader economic jig could change their tune in 2024.

SPONSORED 🔽

Real estate investment trusts (REITs) have been hotter than a habanero pepper lately, their performance tied tightly to the nosedive in long-term interest rates. Remember when we talked about REITs being potential stars with the whole interest rate shift drama? Well, that prediction’s looking brighter than a disco ball, but let’s not pop the champagne corks just yet.

Think of it like this: interest rates are like the thermostat for real estate. When they drop, borrowing gets cheaper, making businesses want to expand and snap up more property. It’s like throwing a sale on prime shopping real estate for businesses. But when rates climb, the buying frenzy cools down faster than a forgotten pizza roll in the microwave.

REITs, these investment vehicles that own and rent out buildings, are basically thermometers for the long-term interest rate climate. So, when rates drop, their cost of living (borrowing costs) goes down, and they can reinvest saved cash for even more properties, potentially boosting their profitability. Naturally, investors looking for steady income and some price appreciation tend to flock to REITs like moths to a flame during these interest rate cool-downs.

Now, why might REITs keep their hot streak going even with interest rates still dipping? Buckle up for a quick rundown of the potential boosters:

Cheap loans, happy developers: Lower rates open the door to bargain-basement borrowing for real estate businesses, letting them snap up more properties and fatten their wallets. It’s like finding a stack of twenties in the couch cushions—except for fancy real estate investors.

Income oasis in a yield desert: When other investments like bonds are offering about as much excitement as watching paint dry, REITs stand out like a neon oasis in a financial desert. Their steady income streams, fueled by rent checks, become even more tempting when other options are coughing up dust bunnies.

Inflation hedge: Remember the inflation monster everyone’s been panicking about? Well, real estate can be its kryptonite. As inflation rises, property values and rents tend to climb too, protecting investors from the purchasing power munchies. Think of it as building a fort out of bricks of rental income to hide from the inflation beast.

But hold on, before we start wearing REI jackets and celebrating in pre-built condos, let’s acknowledge the elephant in the room: the shaky macroeconomic dance floor. We’ve got:

The Fed’s tap-dancing act: The Federal Reserve’s rate hike tango has been a bit clumsy, and if they misstep and tighten things too much (as I’ve been saying for ages!), it could send the whole economy crashing into a disco ball of despair.

Policy pirouettes: Changes in tax laws, zoning rules, or lending practices can be like rogue sprinklers on the real estate dance floor, throwing everyone off rhythm.

Market mamba: Even with the current happy-feet, financial markets are like a salsa club on a Friday night—chaotic and unpredictable. Economic shocks, geopolitical dramas, or unexpected twists can quickly turn the whole party into a tango of tears.

So, what’s the bottom line on REITs? Well, their current boom fueled by falling interest rates could be a major storyline in 2024, with their close link to long-term yields suggesting the party might keep going.

But don’t forget the wobbly economic backdrop, especially when it comes to housing facing a weaker consumer and potential supply glut. Other real estate sectors and REITs, though, could surprise us all and do the moonwalk of success.

Remember, like any investment, REITs come with their own set of risks and rewards. Keep your cool, diversify your portfolio like a master DJ, and keep a close eye on both the interest rate thermostat and the shaky macroeconomic dance floor before you bust a move into REITs.

Disclaimer:

Trading foreign exchange, stocks, options, or futures on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade, you should carefully consider your objectives, financial situation, needs and level of experience.

This newsletter provides general information that does not take into account your objectives, financial situation or needs. The content of this newsletter or our website must not be construed as personal advice. COE Media is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation.

The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. You should seek advice from an independent financial advisor.

Any past performance presented is not necessarily indicative of future success.

Always do your own research and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

Advertising Disclosure: This email contains paid advertisements and we have been paid in some fashion to send this advertisment to our readers.

If you do not wish to receive this email, then we apologize for the inconvenience. You can immediately discontinue receiving this email by clicking on the unsubscribe link and you will no longer receive this email.  If you have any questions, please send an email with your questions to [email protected]

We strongly urge you to read our full disclaimer here.

COE MEDIA.    1126 S Federal Hwy
Unit #827    Fort Lauderdale, FL 33316 

Unsubscribe 

Privacy Policy