Here is a possible totally clear signal. COVID-19 is no longer a “tail risk” for investors, for the first time since February 2020, according to Bank of America in its latest fund managers survey. A tail risk is an unlikely event that could result in large losses or gains.
Scroll down to get this chart.
Meanwhile, the Federal Reserve’s two-day political meeting begins Tuesday and investors will be on the lookout for any false signals that could get some steam out of the shares. The premarket shows mixed action, though many remain hooked on the idea of a post-pandemic boom, at least in the United States as vaccinations develop.
Read: Value stocks are coming back. Don’t be left behind, these analysts say
This has kept records of the DJIA Dow Jones Industrial Average,
and S&P 500 SPX,
and recovery-oriented actions. Our call of the day comes from Bank of America strategists, who offer 17 shares to buy for the three Rs they see coming: recovery, reflation, and requalification.
Strategists Jill Carey, Savita Subramanian and Ohsung Kwon say the economy has reached the middle cycle, where inflation is usually strongest. In these earlier phases, excluding the technology bubble, small capitalizations have outpaced larger ones and value has outpaced growth.
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The Bank of America team says there are two reasons to like these actions: many of the companies that stand out are not yet expensive and active funds are not positioned for this rising inflation, with stronger exposure to megapixels than to capital letters.
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As for the shares (almost half are small or medium-sized companies) …
Alcoa AA,
– BofA has a stock price target of $ 37 for the miner. Aluminum prices could go either way, but growing global demand is an advantage for Alcoa.
Axalta AXTA coating systems,
– Target price per share of £ 37 for the global coatings group. The pace of the car’s recovery will be key and a stronger dollar and lower raw material costs could be a boost.
Broadcom AVGO,
– Stock price target: $ 550. Risks for the semiconductor company include sensitivity to US-China trade relations and competition in networks, smartphones and other markets.
Hess HES,
– Target price of the shares of $ 95. Among the risks of the energy company are oil and gas prices, as well as the slowdown in the evolution of drilling.
Marriott International MAR,
– Stock price target: $ 150. Economic weakness and worse-than-expected spending by businesses and consumers are one of the risks for the hospitality business.
Walt Disney DIS,
– A $ 223 price target for the entertainment giant that has “the best assets in its class.” Negative risks include slowing the growth of ESPN by people who decide not to maintain a cable TV subscription, lower consumer confidence, and low attendance at theme parks. Also watch out for possible failures in the film.
The rest like CNH Industrial CNHI,
Comcast CMCSA,
Emerson Electric EMR,
Herc Holdings HRI,
Knight-Swift Transportation KNX,
Occidental Petroleum OXY,
Parker Hannifin PH,
Principal Financial PFG,
Robert Half International RHI,
Union Pacific UNP,
and World Fuel Services INT,
The graph
Here’s this “tail risk” chart from BofA’s latest monthly fund managers survey. The biggest risks are higher-than-expected inflation and a “rage” in the bond market.
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The markets
YM00 futures,
ES00,
NQ00,
are hesitating a bit, but European stocks are SXXP higher,
It was also a positive day for Asian markets. Elsewhere, oil CL.1,
and the DXY dollar,
are softer and Bitcoin BTCUSD,
it strays further from the $ 60,000 success of the weekend.
The buzz
Retail sales and import prices will advance ahead of the open market, followed by industrial production and the National Association of Home Builders Index. Aside from the start of the Fed meeting, investors will also observe the outcome of a 20-year Treasury bond auction.
Ray Dalio, founder of Bridgewater, the world’s largest hedge fund firm, says investing in bonds is “stupid” and investors should adhere to a “well-diversified portfolio.”
AstraZeneca AZN,
AZN,
shares are higher after Jefferies upgraded the pharmaceutical company to buy withholding. AstraZeneca has been in the top spot as several European countries suspend their COVID-19 shots for reports of blood clots from inoculations.
Finnish telecommunications group Nokia NOKIA,
ENOUGH,
is cutting up to 10,000 jobs to save $ 716 million in two years.
A U.S. government road safety agency team is heading to Detroit to investigate a “violent” accident following a Tesla TSLA,
the vehicle was traveling under a semi-trailer, leaving two people seriously injured.
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