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Markets are always moving and their signals are always mixed. Following a dip in October, money has been pouring steadily into the stock market. And in this week’s ETF Wrap, Christine Idzelis looks at fund flows into and out of exchange-traded funds over the past week, confirming investors’ renewed risk-on attitude while interviewing Matthew Bartolini, head of SPDR Americas research at State Street Global Advisors.
Another element in investors’ renewed euphoria is the surging price of bitcoin
BTCUSD,
Here’s a three-year chart for context:
Bitcoin traded for $43,324 late Thursday. It was down 37% from its peak at 69,000 on Nov. 10, 2021, but it was up 161% from the end of 2022.
FactSet
In this week’s Distributed Ledger, column, Francis Yue explains why cryptocurrency stocks have been performing much better than bitcoin.
In the Year Ahead column, you can see a daily roundup of predictions by investment professionals about what to expect in 2024. Here are examples of recent coverage:
- Fundstrat’s Lee reveals highest S&P 500 forecast on Wall Street. What the stock market’s biggest bull expects in 2024.
- What investors can expect in 2024 after a 2-year battle with the bond market
What about value stocks?
This year the Russell 1000 Index
RUT
has risen 21.3% with dividends reinvested, while its Russell 1000 Growth
RLG
subset is up 37.5% and the Russell 1000 Value Index
RLV
is up only 6.1%. The growth bias reflects this year’s dominance of the “Magnificent Seven” stocks, which include Apple Inc.
AAPL,
Microsoft Corp.
MSFT,
Alphabet Inc.
GOOGL,
GOOG,
Amazon.com Inc.
AMZN,
Nvidia Corp.
NVDA,
Meta Platforms Inc.
META,
and Tesla Inc.
TSLA,
Because the indexes are weighted by market capitalization, the Seven make up 26% of the iShares Russell 1000 ETF
IWB.
They make up nearly 49% of the iShares Russell 1000 Growth ETF
IWF
and nearly 29% of the SPDR S&P 500 ETF Trust
SPY,
which has returned 21% this year.
Why have value stocks (those generally of mature companies that trade low relative to book value or expected earnings, have stable cash flow and pay dividends) been left behind? What should value-oriented investors expect next year? Isabel Wang digs into the data and talks to professional investors to answer those questions.
More on value stock strategies:
- This fund manager crushes the market — here’s what to learn (and own) from his playbook
- These are the dividend stocks that will hold up in a weakening economy in 2024, says this highly rated money manager
Are Ozempic and other GLP-1 weight-loss drugs changing the world? Maybe investors have jumped the gun.
Could the use of Ozempic and discourage exercise and healthier diets?
Getty Images/iStockphoto
Ciara Linnane reports on comments this week from Walmart Inc.
WMT,
CEO Doug McMillon that seemed to walk back observations by another of the retailer’s executives that the use of GLP-1 weight-loss medications was leading to healthier food-buying habits by consumers. While McMillon said shoppers were buying “more fresh foods,” he also said it was too early to predict the ultimate effect of the new medications.
The buzz over Ozempic and competing weight-loss medications helped send shares of snack makers, such as Mondelez International Inc.
MDLZ,
(which counts Oreo, Ritz and Cadbury among its myriad brands) and PepsiCo Inc.
PEP,
(which owns Frito-Lay) down sharply from early August through early October, after which both stocks began to climb.
The notion that an easier path to weight loss through medications can lead to greater awareness of the need to adopt the traditional approach of limiting the intake of sugar and processed foods while increasing exercise is fascinating. But what if the opposite happens? What if “an easy way out” actually encourages people to continue their unhealthy diets and slovenly ways?
This sort of “major health crisis” is one of several admittedly “outrageous” predictions for 2024 from Saxo Bank of Denmark, which makes a habit of stirring the pot with similar foresight every year. Sometimes the bank gets predictions right, as Steve Goldstein reports.
Related: Altimmune’s stock pops as analysts see obesity-drug partnership potential
Words of wisdom for investors and mistakes for novices to avoid
Getty Images
Early each morning, MarketWatch’s Need to Know column zeroes in on an important topic for investors. Two fascinating items from this week’s columns include Barbara Kollmeyer’s interview with Christopher Tsai, CEO of Tsai Capital, whose portfolio has gained 50% this year. Tsai credited his “mentor” Charlie Munger of Berkshire Hathaway with providing excellent advice on how to select companies for investment and what actions not to take.
Another Need to Know piece this week includes a roundup of seven rookie investing mistakes being made by younger investors from Jessica Rabe, the co-founder of DataTrek. Spread the word — some of these mistakes can also be made by investors who have been at it for decades.
Industry and company news
Bank CEOs are sworn in at a Senate Banking Committee hearing on Wednesday. From left: Charles Scharf of Wells Fargo, Brian Moynihan of Bank of America, Jamie Dimon of JPMorgan Chase, Jane Fraser of Citigroup, Ronald O’Hanley of State Street, Robin Vince of BNY Mellon, David Solomon of Goldman Sachs and James Gorman of Morgan Stanley.
Getty Images
Here are some articles from Steve Gelsi covering the banking industry this week:
The Ratings Game column has a daily flow of reaction to corporate events from analysts who work for brokerage firms. Here are recent examples:
Help with retirement
In the Help Me Retire column, Alessandra Malito helps a woman who is 71 and has a good problem — she has saved up the money to pay off her mortgage loan, but the loan has such a low interest rate that she is considering investing the money in an annuity instead. Here are all the factors she needs to consider.
And here’s some help for a couple — the husband is 68 and the wife is 74 — to decide whether to rent or to buy a home.
Microsoft, OpenAI and Nvidia
Microsoft CEO Satya Nadella and Nividia CEO Jensen Huang spoke together at Microsoft’s Ignite 2023 conference on Nov. 16.
Microsoft Corp.
Microsoft is the largest investor in OpenAI, the company that developed ChatGPT. Despite the importance of artificial intelligence to Microsoft and its business plans, the company’s financial ties to OpenAI remain a mystery, as Jeremy Owens explains.
Microsoft CEO Satya Nadella and Nvidia CEO Jensen Huang spoke together at Microsoft’s Ignite 2023 conference on Nov. 16. They agree about the long-term direction of the deployment of AI across industries. Four money managers react to the CEOs’ comments and share their own opinions about related investments.
Brutal family money business
MarketWatch illustration
Quentin Fottrell — the Moneyist — tackles difficult subjects:
A possible, radical solution to some of the highest drug prices
Eleanor Laise reports on an extraordinary investigation by the Biden administration into drug pricing in the U.S. This is a hot topic, especially when U.S. consumers pay two or three times the price that people in other countries pay for medications whose development was subsidized by the U.S. government.
A holiday tipping guide
Someone who helps you child every day is a good candidate for holiday tipping.
Getty Images
Who should you tip? And how much? Andrew Keshner provides this thorough guide.
Related — the Moneyist strikes again: ‘Low-paying jobs are the economy’s way of saying you should get a better job’: I’ve decided to stop tipping, except at restaurants. Am I wrong?
Something else to consider for the holidays: Is giving stock to children a good idea? There might be a better way to teach them about money.
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