Like POTUS’s chances for a Nobel Peace Prize, investor enthusiasm for stocks may not be such a sure thing at the moment.
News that North Korea may bail on that historic summit could adding to the market’s recent worries. That’s after a jumping 10-year yield and dollar strength helped put a halt to the Dow’s eight-session advance yesterday.
it’s almost like the North Koreans wanted to suck Trump into a summit that was good PR for them but never really intended to give up anything. Unfortunately, no one saw this coming and there was no way to guess that this could happen. https://t.co/voiSTNfYii
— Tom Nichols (@RadioFreeTom) May 16, 2018
If this market has truly turned a corner, investors may want a little more proof. Still, a bump in the road may not deter those who love the thrill of the hunt for good stocks.
That brings us to our call of the day from HSBC equity strategist Ben Laider and his team. They offer up 20 stock picks from around the world, saying they have the potential to gain 25% on average from here.
Investors are looking at “more normalized and lower equity-market returns” so stock picking is even more important, Laider says. And rising volatility opens up “great opportunities for potential market dislocations and mispricing,” he writes in a note to clients.
First pick, Mosaic
, which HSBC rates a buy with a $35 price target — making for 32% upside. Why buy? Short supplies seen for phosphate — vital to plant growth — as well as strong earnings and an attractive valuation.
Next, Baker Hughes
, buy rated and with the potential to climb 23%. It’s on track to score $700 million in synergies this year, as well as achieve $7.8 billion in free cash flow over the next three years, says HSBC.
And a little blue box of luxury: Tiffany
, which HSBC likes thanks to its thriving jewelry segment, a management shake-up and a return to growth. They’ve got a $125 price target, implying 21% upside.
Take a look at the following chart, which lays out the rest of Laider & Co.’s picks across Europe and emerging markets:
Key market gauges
, S&P 500
and Nasdaq-100 futures
are wobbling after Tuesday’s downbeat session, which left the Dow
with its biggest loss in three weeks, and the S&P 500
First-quarterly filings for big investment funds may put some stocks in play: Warren Buffett’s Berkshire Hathaway
added to Teva
. Dan Loeb’s Third Point took stakes in Wynn Resorts
, United Tech
and upped a Facebook
holding. Soros Fund Management upped its Aetna
David Einhorn’s Greenlight Capital added to its Brighthouse Financial
stake and trimmed Apple
holdings. Stanley Druckenmiller put his money on chip stocks like Intel
Twitter is planning to crack down on trolls with software that automatically demotes their tweets.
Ireland-based bookie Paddy Power
is in merger talks with FanDuel over a U.S. business. That’s as the U.S. Supreme Court opens the door to widespread sports betting. Fun fact: Americans lost $107 billion last year on state-sanctioned gambling.
Milk lovers were crying in New Zealand. That index slumped about 1.8% after A2 Milk
got crushed 13% over disappointing results.
On the economic beat, housing starts, industrial production and capacity utilization are all rolling out. Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard are both speaking today.
It was notable yesterday that some safety plays like gold or the yen didn’t get much of a look-in even as stocks were slumping. Another such play, the Swiss franc
, hasn’t had a great time of it either.
True Contrarian scribe Steven Jon Kaplan says investors should consider taking a bullish position on the Swiss currency. He tells his subscribers that the franc has had some bouts of dropping below parity against the dollar, which goes against history and “isn’t justified.”
“It is absolutely absurd to dare compare the DPRK, a nuclear weapon state, to Libya which had been at the initial stage of nuclear development. We shed light on the quality of Bolton already in the past, and we do not hide our feeling of repugnance towards him.” — North Korean Deputy Foreign Minister Kim Kye-gwan
That nugget came in the isolated nation’s warning that it could pull out of a summit with U.S. President Donald Trump. Pyongyang is highlighting its unhappiness with demands from American national security adviser John Bolton.
Study shows an alarming rise in number of kids at risk for suicide
“Father of A.I.” says humans need to chill
Google has doodled glamorous deco-era painter Tamara de Lempicka
Baltimore’s police commissioner stepped down after failing to file three years of taxes
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.