I’m Jon Erlichman, here with some fresh market musings and our weekly update on Trade Off, The Globe and Mail’s free online stock picking contest.
The Leaderboard
Let’s start with some of the tournament takeaways so far. A lift in tech stocks since late November when Trade Off trading began has helped portfolios that are overweight on information technology stocks shine bright.
Some of the leaderboard standouts hold stocks such as Palantir and ServiceNow in their baskets.
Continued momentum for lithium miner Albemarle have also made it an early difference-maker for a few top performers. Let’s see what the rest of the year brings!
This Week in Markets
Have stock prices for the Magnificent Seven stocks peaked? Long-time stock market strategist Ed Yardeni sparked a fresh debate on that subject after announcing he’s shifting away from recommending tech stocks.
It’s notable because Mr. Yardeni, the president of Yardeni Research, has been a steadfast bull when it comes to tech for 15 years. His optimism has paid off for investors, given the incredible runs of these growth names.
It’s not that he thinks you should sell your tech stocks. Rather, he argues you probably already have strong exposure to tech, whether you realize it or not. As an example, the Magnificent Seven stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla – represent more than a third of the S&P 500’s entire valuation. So if you’re broadly long the market, you’re also long tech.
Yardeni’s view is that when you look at the other 493 companies in the U.S. benchmark index, there are lots of solid businesses that will benefit from incorporating AI into their operations. In particular, he has his eye on financials, industrials and health care.
It’s worth adding that Canadian investors have also benefited from the growing interest beyond big tech, with the S&P TSX Composite outperforming the S&P 500 this year.
As for Wall Street analysts, they are still supportive of the Magnificent Seven generally, although they do have some preferred picks. According to Bloomberg data, the four stocks that are most commonly recommended and seen as having the most upside are Amazon, Microsoft, Meta and Nvidia.
Trade Secret tips
’Tis the season for tax-loss selling. Here’s some Bay Street perspective on stocks that could be good candidates to sell.
Meanwhile, here’s a look at what investors have been selling that might actually be worth holding on to!
And, after a busy earnings season for Canadian banks, how do you go about picking the best bank stock? Some helpful insight here from Globe investment reporter David Berman.
Good luck with all of your holiday shopping! Don’t forget to keep saving and investing while you’re spending.
Until next week,
Jon
Jon Erlichman is the founder of Ticker Take on YouTube and a contributor to BNN Bloomberg.