By Barbara Kollmeyer
Critical information for US day trading.
Given an environment of rising interest rates, the Nasdaq Composite was hard to love last year, but its 22% decline seems to open up opportunities for some.
Tesla shares (TSLA) climbed premarket after UBS removed the EV maker to buy, citing the opportunity by a 31% reduction in share this year.
That brings us to our call of the day, from Chul Chang, a manager at Vontobel’s US Equity Institutional Fund. He said investors are too busy chasing companies that can handle unexpected macro worries, they don’t notice the gems with “mission -critical products” that are well armored for economic collapse.
“We’re looking for strong franchises that we think … can grow in their competition, grow in the market and get into positions where they will be stronger and bigger on the other side of any macro weakness,” he said. Chang told MarketWatch in an interview on Wednesday.
His fund holds staples such as Coca-Cola (KO), and top holding Microsoft (MSFT).
As for diamonds in the dust, the manager highlights Synopsys (SNPS), a maker of software tools for electronic design automation. Investors are getting defensive posturing, a business with a predictive nature and good growth, Chang said.
“The reason why we know through a downside, through an upcycle, that [Synopsys] What will be solid is that they have the high recurring income that mission critical chip engineers need to do their jobs, ”he said.“ So it’s not a tool you’ll decide to cut because you think the next 12 months that the recession is near or rates will rise. ”
In 2008 and 2009 when the chip industry was shrinking, Synopsys saw flat revenue and delivered revenues, he said. Shares are down 12% this year.
He also likes ServiceNow (NOW), down 22% this year. The software company and its cloud computing platform are the “major players” that corporations use to systemize their workflows.
“It’s early innings when we’re talking about digital transformation, so there’s a lot of growth ahead from just share gains in one category,” he said. ServiceNow has expanded into operations, employee management and customer service management.
“So again, going back to the theme of being defensive in weak times, this is a company that we think continues to grow not just from the secular trends they see, but simply because of the subscription model and being defensive. of their profile., “he said.
Chang’s last choice was Keysight Technologies (KEYS), a leading measurement company with “the widest offerings of equipment for measuring electric signals or radio signals,” with growth also supported by trends. sector. Keysight is down 29% this year.
“In this case, 5G, but what will 5G do for the Internet of Things, or AI or EVs,” he said, noting that Keysight tools are being used to test EV infrastructure, batteries, inverters , so there’s a lot of “rising use that’s just beginning.”
Keysight also sells manufacturing tools, which customers use as they make newer cars, products or smartphones. So those clients see Keysight’s tools as “mission critical” and “won’t be cheap about it,” making it a company “that can deliver, we think double-digit revenue growth in the longer term. weather, ”he said.
The buzz
The European Central Bank announced quantitative easing would end on July 1, leaving the key deposit rate steady at 0.5%, but said to expect a quarter-point hike in July and another increase in September. A news conference with ECB President Christine Lagarde is starting. Next week we will take meetings of the Fed, Bank of England and Bank of Japan.
Weekly jobless claims came in somewhat higher than analysts expected. Household net wealth numbers must be paid later in the day.
Chinese EV maker NIO (NIO) dropped on a disappointing earnings guide in the second quarter, even as it narrowed its losses in the first quarter. Chinese ADRs were also forced after a report that the China Securities Regulatory Commission was not undertaking work to revive Ant Group’s initial public offering.
Bilibili stock (BILI) fell after the China-based video sharing company reported a broader-than-expected loss.
FuelCell Energy (FCEL) is down after reporting broader-than-expected losses in the second fiscal quarter and disappointing earnings.
Twitter (TWTR) is reportedly going to offer Elon Musk a data-sharing agreement to settle Tesla chief’s (TSLA) doubts about bots on the social media site and get the $ 44 billion deal on taking.
Dutch and UK natural gas prices rose double digits after an explosion in Texas at major liquified natural gas exporter, Freeport. The explosion will cause a shutdown for at least three weeks.
The Shanghai district of Minhang (pop. 2 million) is under strict lockdown and will undergo mass test due to a COVID outbreak. “Markets are naive pricing because the easing of restrictions in Beijing and Shanghai is the last victory against omicron, and thus, the highest covid-zero,” said Jeffery Halley, senior market analyst at OANDA.
The markets
Stocks are under pressure, as bond yields remain high. Oil prices are hovering at approximately $ 121 per barrel, the dollar is steady and gold is falling, while bitcoin is clinging to the $ 30,000 level.
Read: Oil prices could be ‘parabolic’, put the global economy in ‘critical situation,’ says head of commodity trading giant
The tickers
These are the top traded tickers on MarketWatch starting 6 am Eastern Time:
Ticker Security name TSLA Tesla GME GameStop AMC AMC Entertainment NIO NIO BABA Alibaba AMZN Amazon AAPL Apple RDBX Redbox Entertainment MULN Mullen Automotive
The chart
Our chart of the day is from Michael Cembalest, chairman of market and investment strategy at JP Morgan Asset Management, who lays out trends in energy transfer. He included a chart showing how disruption has been slower over the past 20 years in some parts of the economy than others. For example, everyone seems to have a smartphone, but fewer people than you think own an electric vehicle.
Random reading
American tourists were fined after throwing a scooter down the stairs of a UNESCO World Heritage site in Rome, causing $ 26,000 in damage.
Late-night talk show host Jimmy Kimmel told President Biden that “he needs to start shouting at people.”
The Tik Tok trend combines sparkling water and balsamic vinegar for the hottest, healthiest new Coke of the summer
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-Barbara Kollmeyer
(END) Dow Jones Newswires
06-09-22 0951ET
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