In today’s top stories, Toyota targets the European electric vehicle market, solar stocks rise and United Airlines gets approval from Morgan Stanley, who see a 48% upside for the stock. Truist Advisory Services co-CIO touts US government-backed bonds as a recession play, while Reddit retailers explore the bond markets.
Toyota targets Europe EV market
China may be the leading region when it comes to global EV production and sales, but Europe is being targeted by automakers. Toyota [TM] has announced it intends to bring five fully electric models to the continent’s market by the end of 2026. However, the European Automobile Manufacturers Association has warned that prices of EVs sold or made in the EU could potentially rise by 10% due to a tariff disagreement between the UK and the European Union.
Solar stocks rise on US probe results
Solar stocks with ties to Chinese manufacturers rose last Friday after a US probe concluded that some Chinese companies were evading tariffs, though the number isn’t as high as expected. “There’s a sense of relief that there’s a way forward even though there will be some disruption,” Guggenheim Securities analyst, Joe Osha, told Bloomberg. Solar will help to power renewables to become the largest source of electricity by 2025, the IEA has forecast.
United Airlines to take flight in 2023
Aviation travel took a nosedive during the pandemic. However, United Airlines [UA] could soon take flight, according to Morgan Stanley analyst Ravi Shanker, who wrote in a note seen by CNBC that “2023 could be the year when conditions are ‘just right,’ potentially delivering earnings well above market expectations”. Both United and Boeing’s [BA] share prices have been trading higher following reports that United is close to ordering dozens of Boeing 787s.
Buy government-backed debt says Truist’s Lerner
As analysts remain divided over when the S&P 500 will bottom, bonds and other forms of government-backed debt could be a good investment next year, argued Keith Lerner, co-chief investment officer at Truist Advisory Services. “History has shown that during economic slowdowns, both investment-grade and high-yield corporate bonds have underperformed US government bonds,” wrote Lerner in research seen by MarketWatch. Government-backed debt has returned an average of 6.6% over the past four recessions.
Reddit retail investors turn to bonds
US government bonds have already caught the attention of some of the Reddit crowd who’ve turned their backs on meme stocks like AMC [AMC], Bed Bath & Beyond [BBBY] and GameStop [GME]. Bloomberg spoke to a couple of retail investors that have dipped their toes in their bond market and concluded that its lack of quick returns means it’s unlikely to become a new meme target. After all, bonds are meant to be a low-risk option that protects against inflation.
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