Trading Concept
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Trading Concept
No Result
View All Result
Home Trading News

Why these are the worst stocks to own right now: Goldman Sachs

by
November 22, 2021
in Trading News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

Not every sector of the market is a longer-term buy even with stocks continuing to be on autopilot, warn strategists at Goldman Sachs. 

Some of the worst stocks to own in a U.S. economy trying to claw back from the COVID-19 pandemic are those with high exposure to tight labor markets, which runs the risk of pressuring profit margins as wages are hiked.

RELATED POSTS

Wealthy customers will help Apple resist the effects of inflation

Chinese purchase of North Dakota farmland raises national security concerns in Washington

“Labor market tightness will remain a challenge during the next few years. Investors should avoid stocks with high labor costs relative to EBIT [earnings before interest and taxes],” says David Kostin, Goldman Sachs chief U.S. equity strategist, in a new research note to clients. 

Several of the companies that fall under this category, per Goldman’s analysis includes IBM (IBM), Raytheon (RTX), HCA Healthcare (HCA), FedEx (FDX) and Dollar General (DG).

On the other hand, Kostin and his team think reopening stocks with cyclical exposure are the better bet at the moment. 

Explains Kostin, “While virus counts are now rising and weighing on reopening stocks, as the winter wave passes, declining virus and inflation headwinds should provide a near-term boost to corporate revenues and margins for the businesses most exposed to these challenges.”

Companies such as Best Buy (BBY), Home Depot (HD), Lowe’s (LOW), D.R. Horton (DHI), KB Home (KBH) and Lennar (LEN) appear positioned for a cyclical upswing, points out Kostin.

In the near-term, however, both high labor exposure stocks and reopening stocks may work well for investors as markets digest recent Federal Reserve news.

Monday morning, President Biden renominated Powell as Fed chief, ending weeks of speculation on the topic. Biden also nominated Lael Brainard to the position of vice chair. Both are seen as monetary policy doves by market participants, hinting the Fed may be inclined to push off interest rate hikes in 2022 even with inflation remaining elevated.

In turn, that would be good for valuation multiples.

Stock markets soared on the news, with the Dow Jones Industrial Average rising by more than 300 points at one point early in Monday’s session.

“With the Fed on hold until mid-year 2022 and bond yields below 2%, equities will remain the asset of choice for both institutional and retail investors,” contends Kostin. 

The closely watched strategist sees the S&P 500 hitting 5,100 by the of 2022, up about 10% from current levels.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

ShareTweetPin

Related Posts

Wealthy customers will help Apple resist the effects of inflation

by
July 1, 2022
0

An employee arranges Apple iPhones as customer shop at an Apple store. Mike Segar | Reuters The last time Apple...

Chinese purchase of North Dakota farmland raises national security concerns in Washington

by
July 1, 2022
0

Farmland in southern North Dakota near Bismarck on September 2, 2016. Robyn Beck | Afp | Getty Images At first...

‘The Big Short’ investor Michael Burry thinks financial markets rout is only halfway through

by
July 1, 2022
0

"The Big Short" investor Michael Burry, known for calling the subprime mortgage crisis, warned investors that 2022's market turmoil is...

Ohio Governor DeWine says Intel delay on $20 billion chip plant is about ‘leverage’

by
July 1, 2022
0

In this article INTC Ohio Gov. Mike DeWine still has high hopes for Intel, even after the company announced that...

The IPO market is hibernating, waiting for the market to turn

by
July 1, 2022
0

You think the stock market had a bad quarter? The IPO market was a catastrophe, and it's not looking much...

Next Post

Nasdaq dips 1% as bond yields rise, tech falters after Biden picks Powell for second Fed term

Zoom beats estimates even as revenue growth is poised to slow after pandemic

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:



By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • Forget Tesla — this auto stock is the one to buy right now, analyst says

    0 shares
    Share 0 Tweet 0
  • WHO says Covid vaccine booster programs will prolong pandemic

    0 shares
    Share 0 Tweet 0
  • Spin or Split? AT&T Has a Big Decision to Make on Discovery Stake.

    0 shares
    Share 0 Tweet 0
  • Here’s how Carl Icahn is positioning for a possible recession in America

    0 shares
    Share 0 Tweet 0
  • Some lawmakers and their families are betting thousands of dollars on crypto

    0 shares
    Share 0 Tweet 0
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by tradingconcept.net
No Result
View All Result
  • Email Whitelisting
  • Home
  • Privacy Policy

All rights reserved by www.tradingconcept.net