A girl walks close to the Apple retailer in New York, U.S., December 26, 2023.
Eduardo Munoz | Reuters
My top 10 things to watch Tuesday, Jan. 2
1. The S&P 500 completed 2023 with 9 straight up weeks, its greatest successful streak since 2004. Up 24% for the 12 months. We’re kicking off the new 12 months by trimming 8 stocks that had big runs final 12 months. Bulls become profitable, bears become profitable, and hogs get slaughtered. We’ve been feeling grasping throughout this historic stretch, and refuse to be hogs after the nice 12 months these shares have had.
2. Stock futures had been decrease Tuesday, led down by Apple(*10*), which was downgraded to promote from purchase at Barclays. The analysts predict gradual {hardware} gross sales and repair income stream progress beneath 10%. Looking for a reversion. I’m sympathetic to this place, with Apple buying and selling at 29 instances this 12 months’s earnings forecast. UBS says gross sales are delicate. Share fells 2% earlier than the bell.
3. Deutsche Bank throws in the towel on Club title Estee Lauder(*10*), considered one of our worst picks (after being considered one of the greatest) due to slowing gross sales in China and Asia. Goes to maintain from purchase. Shares down greater than 2% in the premarket.
4. BXP(*10*) upgraded to purchase from maintain at Jefferies, which says that whereas headlines for broader workplace sentiment will stay unfavorable, public sentiment for REITs will enhance. This is considered one of the few winners in the area and I’d not promote it. I additionally suppose the harm to the REITs in business actual property proved to be approach overblown.
5. Goldman Sachs takes Parker-Hannifin(*10*) to conviction purchase from purchase, precisely as it’s best to do after a tightening cycle ends. This is what you need … similar with Textron(*10*), which additionally will get upgraded to conviction purchase. Meanwhile, Goldman downgrades Boeing(*10*) to purchase from conviction purchase. I say too quickly to downgrade but it surely does keep on purchase checklist.
6. Bath & Body Works(*10*) downgraded to purchase from conviction purchase at Goldman. Director’s lower.These retailers have made main strikes already.
7. Expedia(*10*) upgraded to maintain from promote at Wells Fargo. This ought to by no means have been a promote. It is doing too nicely. So is Booking Holdings(*10*), to maintain from promote at Wells. The two greatest.
8. Barclays raises value goal on Bank of America to $43 from $39, citing web curiosity revenue troughs amid stabilizing deposit traits and mortgage progress. Also raised on Citi(*10*), JPMorgan(*10*), Morgan Stanley(*10*), Goldman Sachs(*10*) and all the others. Seems somewhat gratuitous, however all of them do commerce collectively. Huntington Bancshares(*10*) promote to maintain — I actually like this one. We like Morgan Stanley (to $116 from $102) and Wells Fargo (to $66 from $54 ). I’d be sellers at these new targets, however you might be supposed to purchase these when the Federal Reserve stops tightening. Wells says Citi stock value will double over the subsequent three years.
9. Deutsche Bank notches up value targets on Clorox(*10*) and Colgate-Palmolive(*10*) — first rate danger reward. I believe these are the mistaken shares to personal at this level in the cycle.
10. Stifel takes up Advanced Micro Devices(*10*) to $170 from $145. Likes semis with “supreme combine” of already having seen a correction, sturdy steadiness sheet and ties to secular traits like AI.
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