Bulls seem to be winning again. The US stock market, having come under pressure from the US-China trade relationship, is once again gaining momentum with the hope that the US will prepare a possible interest rate cut to prevent a recession if the trade war lags and the economy lingers harm. ]
This positive development, combined with the US and Mexico agreeing to an immigration deal, can also contribute to positive sentiment this week. President Trump announced late Friday that he would not impose tariffs on goods from Mexico – rising from 5% to 25% over time – after the country had agreed to adopt a tougher stance on immigration.
For investors who want to focus on company-specific developments, here are our top three stocks:
1. Broadcom
Broadcom (NASDAQ 🙂 is the last chip maker to report on during this income season, amid the uncertainties in trade in China. The company Q2 2019 numbers on Thursday, June 13, after the close. Consensus calls for $ 5.21 EPS on $ 5.69 B in revenue.
With the majority of semiconductors exposed to the US-China trade war, chances are that Broadcom will lower its profit forecast for the remainder of the year. Analysts warn that the last recession in the sector will be long and painful
The combination of 25% tariffs on Chinese goods, the American blacklisting Huawei Technologies and the consistent reprisals of China can freeze the supply chain in the industry and hurt companies such as Broadcom. But despite the recent downturn in the semiconductor industry, Broadcom is one chip stock that we like because of the diversified product lines and the very attractive dividend yield of 4.1%.
These two strengths will help Broadcom to weather the storm and the rebound if the US and China reach a trade deal. The shares, which ended on Friday at $ 274.87, have risen by around 4% in the last three months
2. Lululemon
The athletic clothing store, Lululemon Athletica (NASDAQ 🙂 reports its quarterly Wednesday, June 12, after the bell. The market consensus is $ 0.7 a share gain and $ 756 million in revenue.
There is hardly anything about this from the maker of high-quality yoga clothing that investors can complain about this year. It has a great product mix that resonates well with customers, improving store visits and sales in the same store. Lululemon's investments to improve its e-commerce channels are also bearing fruit, as online penetration reached 26%, with some analysts, including Cowen, Inc., calling call management "almost flawless" and Morgan Stanley said the company was "on fire". all cylinders. "
The shares also reflect this optimistic outlook, rising 43% this year, performing massively better than the. They closed on Friday at $ 172.49, close to the highest position of 52 weeks. The share had risen 16% when the company reached its profit forecast for the fourth quarter in March.
3. United Technologies
United Technologies (NYSE 🙂 and Raytheon (NYSE 🙂 are in talks about merging their activities into a deal that would create a giant in the aerospace and defense industries, according to reports in the media on the weekend
The all-stock transaction could be announced in the coming days, according to the Wall Street Journal. United Technologies has a market value of around $ 114 billion, while Raytheon is estimated at around $ 52 billion.
A deal with Raytheon would expand the transformation of United Technologies under Chief Executive Officer Greg Hayes, who is already planning to roll out the company's Carrier climate controls and Otis lift activities. Said Douglas Rothacker, an aviation / car analyst at Bloomberg Intelligence:
"Combining the space operations of United Technologies, which is expected to generate $ 50 billion in revenue in 2020, and Raytheon & $ 39 billion would create the second largest Western space defense company."
However, it is not clear how the market will absorb this news and the challenges associated with the combined entities, especially when there is so much on the shelf for Hayes in the midst of the company's restructuring
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UTX shares closed at $ 132.15 on Friday, this year won more than 25%.
