Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Goldman Sachs U.S. equity strategist David Kostin has released his 2021 market outlook with a 107-page slide deck. He is bullish, predicting a 4.0-per-cent gain for the S&P 500 by year-end and a strong 16-per-cent return for 2021.
Mr. Kostin highlights his list of preferred “Rule of 10” stocks, those with revenue growth above 10 per cent for 2018, 2019, and expected sales growth above 10 per cent for 2021 and 2022.
There are 21 companies on the list including Netflix Inc., Twitter Inc., Monster Beverage Corp., Vertex Pharmaceuticals, ABIOMED Inc., Intuitive Surgical Inc., Edwards LifeSciences, salesforce.com, Adobe Inc., Arista Networks Inc. and Mastercard Inc.
"@SBarlow_ROB GS ‘rule of ten’ list of secular growth stocks: “10% sales growth in 2018, 2019, 2021E, and 2022E and 5-year CAGR of 10%+"” – (table) Twitter
BofA Securities published a series of thick reports touting Gen Z as “the most disruptive generation” in history. I initially rolled my eyes but then remembered that social media and streaming were two major Millennial investing themes and they worked out pretty well. From OK Zoomer: Gen Z Primer …,
“Gen Z: the most disruptive generation ever, growing income 5x to $33tn by 2030, set to surpass Millennials by 2031 . nearly half are online ‘almost constantly’ and a quarter of them will spend 10+ hours a day on their phone. In our survey, over a quarter of Gen Z’s top payment choice was the phone, while credit cards weren’t even in their top 3. This generation is the least likely to pick experiences over goods, and values sustainable luxury - choosing quality over price as their top purchase factor. ‘Peak’ generation: alcohol, meat, cars, travel headwinds: Only half of US teens can drive, while our survey finds that less than half of Gen Z drink alcohol, and more than half have some kind of meat restriction. A third of them would trust a robot to make their financial decisions. Gen Z’s activist focus filters into their interactions with business, too - 80% factor ESG investing into their financial decisions, and they have also driven consumer-facing sustainability campaigns, such as single-use plastics. Harmful consumer sectors, such as fast fashion, may be the next focus.”
My takeaway from these reports is that I need to spend more time with pay by phone applications.
“@SBarlow_ROB BoA: Gen Z will murder meat, alcohol industries” – (research excerpt) Twitter
Credit Suisse U.S. equity strategist Jonathan Golub has made a host of changes in his sector recommendations for 2021. Mr. Golub has upgraded health care and financials to overweight , where they join technology communications services and internet retail. Industrials, materials and energy have been up graded from underweight to market weight while staples and utilities were downgraded to underweight.
“@SBarlow_ROB Credit Suisse’s Golub makes a bunch of sector recommendation changes for 2021” – (graphic) Twitter
Diversion: “Lavish home of the indulgent Emperor Caligula is discovered in Rome revealing he had an ornate garden and an exotic menagerie before his murder in AD 41” – Daily Mail
Tweet of the Day:
Retail sales have continued their climb, impressively after making a full V-shaped recovery; but for past 10 years, growth in nonstore retail has been exponential vs. overall sales @Bloomberg pic.twitter.com/eMnQCu8ghs— Liz Ann Sonders (@LizAnnSonders) November 18, 2020
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