Despite Friday’s rally, The major indices posted modest weekly declines following less than inspiring comments from Fed Chair Jerome Powell regarding the course of interest rate hikes. The S&P 500 and the Dow fell roughly 1% and the Nasdaq was essentially flat. Although stocks made sizable daily movements in the latest week, they’ve traded in a relatively narrow range since early April.
With around 85% of S&P 500 companies having reported first-quarter results so far, key metrics this earnings season have come in better than their one-year averages, according to FactSet. The research firm also reports that the overall earnings outlook for full-year 2023 has improved in recent weeks. In the coming days we can expect earnings from PayPal, Airbnb, Disney, Electronic Arts, and automakers Toyota and Honda, among others.
Market participants will also be tuned in for the Consumer Price Index (CPI) report scheduled to be released on Wednesday to find out whether the recent moderation in inflation extended into April. In March, inflation fell to a 5.0% annual rate from 6.0% the previous month, bringing inflation to the lowest level in nearly two years.
For anyone looking to stay ahead of the curve when it comes to investments our weekly stock watchlist is the perfect way to do just that. Our team of expert analysts scours the market to bring you the three top stocks that you need to be watching in the coming week. Don’t miss this week’s picks – click this link to access our latest watchlist now!
2022’s energy sector tailwinds will be almost impossible to replicate. Still, certain sparks – including China’s reopening, continued conflict in Ukraine and possibility of more surprise output cut announcements from OPEC+ – could sustain a floor under oil prices. While the odds are against energy repeating as the S&P leader this year, there is reason to believe energy still has more gas in the tank. Our first recommendation lets you profit from energy sector tailwinds without having to pick individual stocks.
Energy Select Sector SPDR Fund (XLE)
The Energy Select Sector SPDR Fund is the largest energy ETF on the market by far. At $38 billion, XLE has roughly 5x as much in assets under management than No. 2, the Vanguard Energy ETF (VDE) ~$8 billion in assets under management.
XLE, which will celebrate its 25th birthday next December, is pretty cut-and-dry. It’s a collection of the energy-sector stocks found within the S&P 500. In other words, you’re getting a concentrated heap of big, blue-chip, U.S.-based oil-and-gas exposure. The fund is weighted by market cap, which means the bigger the stock, the larger the stake. Currently its positions in Exxon Mobil (XOM) and Chevron (CVX) combined account for well over 40% of XLE’s assets. So if concentration is a concern, a different strategy may be more appropriate. The fund has a desirable 0.10% expense ratio and offers a 3.8% dividend yield.
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LPL Financial Holdings (LPLA)
San Diego-based independent investment advisory LPL Financial generates revenue through a small percentage of the fees and commissions of the 21,000 financial advisors using its technology. In other words, it makes a little from a lot of advisors.
In the first quarter LPL added $21 billion in net new assets, an annualized organic growth rate of 7.5%. Additionally, it recently made two strategic acquisitions for around $150 million, providing a sizeable boost to the number of advisors using its products and services. As of March 31, 2023, LPL Financial’s total brokerage and advisory assets were $1,175.2 billion.The current consensus among 15 polled analysts is to Buy LPLA, with no recommendations in the group. A median price target of $242.50 leaves room for a 27% upside.
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Microvast Holdings, Inc. (MVST)
Headquartered in Stafford, Texas, Microvast Holdings, Inc. designs, develops, and manufactures various Li-ion battery solutions for electric vehicles and energy storage systems. The company’s continued focus on R&D and technology investments offers improved battery performance at highly competitive prices. Microvast’s MV-C Gen 4 high-energy lithium-ion battery packs have been specifically designed for commercial vehicle applications, offering a high energy density of 53.5Ah, a long cycle life of 5,000+ cycles, and a modular pack design for easy installation.
“Microvast’s high-performance battery technologies provide the required high energy density, enabling us to deliver the high power and performance our industrial vehicles require to move heavy loads and perform demanding industrial applications,” explained Sven Woyciniuk, Head of Electrical Engineering at MAFI & TREPEL.
Analysts are only starting to take notice of MVST, with only two covering the stock. Nonetheless, both analysts see the stock as a Strong Buy and see a median increase of nearly 600% over the next twelve months. Microvast is a speculative play and may not be for everyone. Investors with a high tolerance for risk may want to consider this ticker for potential 6x gains.
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