The Stock Market Still Faces Headwinds. Amazon and Other Stocks Could Do Fine.

There are no crystal balls in investing. But if interest rates stay higher for longer and the economy sputters next year, there is one group of stocks that could shine.

The firm has a cautious outlook over the next six to 12 months. Senyek said inflation will be more persistent than consensus estimates suggest, giving the Federal Reserve reason to keep interest rates higher than investors had expected, and hold them there for longer. The yield on 10-year U.S. government debt will rise above 5% again before year-end, and economic growth will be sluggish, Wolfe expects.

Although the futures market is pricing in reductions starting in May, it is even possible that the Fed could raise rates again, building on the 11 increases that have taken the bank’s target for the fed-funds rate from near zero to 5.25%-5.50% since March 2022, he said. “If inflation proves to be sticky and the economy proves to be resilient, then the Fed could end up having to hike again sometime next year, but our base case is they’re done for now,” Senyek said.

To further narrow down the list, he advised looking for companies with free-cash-flow yields of 4% or more. The metric—a company’s free cash flow divided by its market capitalization—indicates how investors are valuing the company’s cash production. A high free-cash-flow yield usually means a company is in good shape to maintain or increase its dividend or ramp up capital investments.

Nigeria Nigeria Latest News, Nigeria Nigeria Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

‘Stock-market correction is over’ after broad surge amid ‘epic’ market ralliesYardeni Research breaks out winning sectors in the S&P 500’s surge last week
Source: MarketWatch - 🏆 3. / 97 Read more »

Here's how the stock market can build on its best week of the yearWe have not been in a halcyon moment in ages. And, no one ever wants to call anything halcyon.
Source: CNBC - 🏆 12. / 72 Read more »

Stock market today: Wall Street closes its best week of the year with even more gainsAsian shares have advanced following Wall Street gains last week that were buoyed by hopes for early interest rate cuts. South Korea's Kospi jumped more than 4% after the government restored a ban on short-selling that had been lifted since May 2021. Japan's benchmark was up 2.4%.
Source: AP - 🏆 728. / 51 Read more »

Stock Market News Today: Dow, S&P 500 Slip; Tesla, WeWork Stocks in FocusLive coverage of stocks and financial news, including the S&P 500, Dow and Nasdaq Composite.
Source: WSJ - 🏆 98. / 63 Read more »

Stock Market Today: Dow ends higher, but rising Treasury yields keep lid on gainsStock Market Today: Dow ends higher, but rising Treasury yields keep lid on gains
Source: Investingcom - 🏆 450. / 53 Read more »

Apple Inc. stock rises Monday, outperforms marketSupported by world-class markets data from Dow Jones and FactSet, and partnering with Automated Insights, MarketWatch Automation brings you the latest, most pertinent content at record speed and with unparalleled accuracy.
Source: MarketWatch - 🏆 3. / 97 Read more »