Despite looming concerns over the US debt ceiling, stocks edged higher last week, with the S&P 500 breaking through the 4,200 level for the first time since late August. The index’s weekly gain of 1.6% lifted it above a narrow range it had been stuck in since the start of April. Meanwhile, the Nasdaq outperformed for the fourth week in a row with a 2.9% gain, and the Dow added a marginal 0.3%.
In addition to tracking the latest negotiations over the government debt ceiling, market participants will be focused on Wednesday’s release of minutes from the most recent Federal Reserve’s policy meeting that concluded on May 3. Investors will be looking for clues on Fed officials’ current views on whether to pause its rate-hiking cycle or lift rates for the eleventh meeting in a row during the upcoming June 13–14 meeting. We can also expect more earnings results from the retail sector next week, with Costco, Dollar Tree, Dick’s Sporting Goods, The Gap, and several others scheduled to report. Notable tech names Nvidia and Zoom Communications are also set to report.
For those determined to stay ahead of the game in the investment world, our weekly stock watchlist offers the perfect solution. Our team of expert analysts diligently scours the market to bring you the three most compelling stocks that demand your attention in the coming week.
Nvidia (NVDA)
Most tech investors are familiar with the company’s graphics processing units (GPUs) for the gaming industry. But Nvidia has a myriad of strengths beyond that. Over the years, the company has invested heavily in relevant segments such as AI and machine learning.
Since tech firms tend to be cyclical, NVDA wouldn’t necessarily be the best choice for investors seeking stability. However, it does offer attractive financial metrics. Its three-year revenue growth rate soars above most of the competition at 34.5%, and its book growth rate reached a robust 21.6% during the same period. Plus, the enterprise features a profitable framework. For example, its net margin is 16.19%, ranked better than 67% of semiconductor companies.
The market expects Nvidia to deliver a year-over-year decline in earnings on lower revenue when it reports earnings on May 24. Will the share price move higher before or after the quarterly release? We’ll have to wait and find out.
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Las Vegas Sands (LVS)
With American consumers expected to continue cutting back on discretionary spending in the second half of the year, resourceful investors have taken a shine to leisure names with significant exposure in China, where a robust recovery in travel and tourism spending is underway. As the US consumer softens, Macau-centric Las Vegas Sands has been gaining steam.
While travel restrictions impacted LVS’s Q1 performance, Wall Street is enthusiastic about the company’s performance throughout 2023 and the years ahead. Stifel recently upped its 12-month price target for the stock to $73 from $66 on the attractive risk/reward setup, stating, “If the U.S. consumer does decline, the pent-up demand from China’s and Singapore’s only gaming market should be healthy for another 12 months.”
LVS has risen 23% year to date and currently holds an 80% Buy rating. The pros covering the stock see a 47% upside over the next twelve months, a figure which has risen 10% over the past 30 days.
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iShares Global Energy ETF (IXC)
Energy inflation isn’t a purely American phenomenon. The rest of the world has also suffered from higher oil and gas prices … and many international oil giants have profited along with their U.S. counterparts.
The largest, most liquid fund covering a worldwide spectrum of energy equities is the iShares Global Energy ETF (IXC) – a nearly $2-billion-plus portfolio of 52 companies that dominate global energy production, refining, storage, and other industries. The fund includes both domestic and international stocks. The official breakdown is the U.S. 60%/rest of the world 40%, with the U.K. (12%), Canada (11%), and France (5%) representing the top non-American country weights.
Giants Exxon and Chevron still lead the way here, at 17% and 11%, respectively. But this fund also provides significant exposure to international energy giants, including Britain’s Shell at 8%, BP at 4%, and France’s TotalEnergies at 5%. If you’re looking to defray a bit of geographic risk, IXC is one of the best energy ETFs to do so while still printing a nice profit from higher global commodity prices. The fund has an expense ratio of 0.4% and comes with an attractive 4.7% yield.
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