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💰 Worth Its Weight in Gold
Plus, Gundlach says the Fed needs to do this...
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Happy Tuesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.
🟨 | US stocks were mixed. The S&P 500 and the Dow were both flat as the market awaited the Federal Reserve’s interest rate cut decision; the Nasdaq Composite edged 0.2% higher.
📈 | One Notable Gainer: Gannett shares jumped 19% after Citi upgraded the stock from sell to neutral, citing expectations of slower revenue decline and potential for flat growth in Q4, which could drive multiple expansion.
📉 | One Notable Decliner: Shares of Accenture fell 5% after a Bloomberg report, citing sources, revealed the company plans to shift most promotions from December to June.
💰 | Tomorrow's Trade: Worth Its Weight in Gold. Scroll down for more.
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S&P 500 Heatmap. Credit: Finviz
All Stock Heatmap. Credit: Finviz
Global ADR snapshot. Credit: Finviz
MARKET MOVERS
HPQ (+2%) Hewlett Packard Enterprise Gets Bank of America Upgrade on AI, Cost Cuts (Investopedia)
INTC (+3%) New Intel Deal with Amazon Sends Shares Climbing (TipRanks)
APP (+6%) AppLovin shares rise in pre-open trade on UBS upgrade (Investing.com)
GEV (+3%) HSBC raises GE Vernova stock target on growth outlook (Investing.com)
PM (-2%) Philip Morris to sell Vectura for $198 million after health shift criticism (Reuters)
OVERHEARD ON THE STREET
Market Watch: Oil futures finished higher Tuesday, appearing to get a lift after pagers carried by Hezbollah operatives in Lebanon exploded around the same time in an apparent attack — raising fears of a broader Middle East conflict that could threaten crude flows from the region.
CNBC: DoubleLine Capital CEO Jeffrey Gundlach said Tuesday that the Federal Reserve needs to ease policy swiftly amid the current economic slowdown, seeing a half-point interest-rate reduction this week.
AP: Instagram will automatically set new teen accounts to private and migrate existing ones in the U.S., U.K., Canada, and Australia, starting Tuesday.
Reuters: Boeing and its largest union will resume contract talks Tuesday as a strike by 30,000 workers, costing $100M daily, continues over pay and bonuses.
CNN: Sam’s Club will raise its minimum wage to $16 in November and increase wages for nearly 100,000 employees to stay competitive with Costco.
Reuters: Kroger-Albertsons' US anti-trust trial concludes Tuesday, but further legal challenges loom over potential grocery price hikes and labor impacts.
TOMORROW’S TRADE IDEA, TODAY
Worth Its Weight in Gold
Forget the Pick and Shovel
Gold reached a new all-time high of $2,600 per ounce on Monday — and Bank of America (BAC) is confident the precious metal’s rally is far from over. In fact, the bank believes Fed rate cuts could push gold to $3,000 per ounce by next year.
But rather than a pick-and-shovel play, BoA believes investors looking to play this gold rush can go right to the source — one of the world’s largest gold mining companies, Gold Fields (GFI).
Short-Term Production
BoA analyst Jason Fairclough believes Gold Fields has around 13% upside over the next 12 months.
The firm’s key asset is the Salares Norte mine located in Chile. The mine has been bogged down in recent years thanks to a combination of the pandemic, macroeconomic challenges, and poor weather. But those headwinds seem to be in the rearview, and near-term gold production is expected to increase.
Fairclough projects that Salares Norte could make up around 22% of the company's production by FY 2026.
Long-Term Growth
Gold Field’s long-term outlook is solid, as well, according to Fairclough. He is bullish on its acquisition of Canada’s Osisko Mining last month. This deal should make Gold Fields the sole owner of a Canadian project expected to yield 300,000 ounces of gold per year.
On top of that, Gold Fields is making great strides in its continuous effort to build a sustainable business through modernization and solidifying its reserves.
With another gold rally potentially on the horizon, BoA is a proponent of Occam’s razor: The simplest investment is usually the best one.
Are you bullish or bearish on Gold Fields (GFI) over the next 12 months? |
TOGETHER WITH BETTERMENT
Your IRA, made to order
Choose where and when you want to retire, and a Betterment IRA can help make your money hustle all the way there.
ON OUR RADAR
CNBC: Michael Kors testified that selling handbags is harder with TikTok and Taylor Swift's influence, as the FTC seeks to block Tapestry’s $8.5B Capri deal.
WSJ: Meta bans Russia’s RT from Facebook and Instagram following U.S. sanctions for alleged election interference, cutting off a key distribution platform.
BI: Lower interest rates could revive the struggling U.S. commercial real estate market, boosting buyer confidence and property values despite ongoing challenges.
CNN: A new report reveals that while women’s leadership roles have increased since 2015, achieving gender parity in corporate America could take decades.
BI: Baby boomers are depleting retirement savings for medical costs, forcing a return to work and revealing gaps in healthcare coverage.
YESTERAY’S POLL RESULTS
🟩🟩🟩🟩🟩🟩 🐂 Bullish
🟨⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish
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