In today’s top stories, retail investors interest in big tech stocks returns, Atlas Air is in buyout talks and analysts find value in automotive part companies. Meanwhile, investors considered the likelihood of the S&P 500 declining in August and Standard Chartered reveals the 14 indicators its watching for signs of a recession.
Individual investors bet on big tech
It seems that FAANG stocks still have their bite. According to data from Vanda Research, individual share purchases of Meta [META], Apple [AAPL], Amazon [AMZN], Netflix [NFLX] and Google [GOOGL] reached their highest level since 2014 in July. Retail investors’ optimism is believed to have been a major factor in the Nasdaq Composite gaining around 12.4% last month, albeit it’s still in bear market territory.
S&P 500’s next leg lower
Investors feeling hopeful following July’s rally should hold their horses. History shows the S&P 500 performs worse in August and September with the index seeing average declines of 0.6% and 0.7% respectively over the past 25 years, according to Bloomberg. The answer to whether stocks will move a leg lower depends on whether the risk of recession and an economic downturn has already been priced in.
Finding value in spare parts
New car sales may have stalled, but bargain hunters can find value in automotive parts. Stephens analyst Daniel Imbro believes that the aftermarket, rather than original equipment manufacturers, is the place to look — with people tightening their belts, they’re more likely to repair a part than replace it. Standard Motor Products [SMP] is “a small-cap way to get exposure to an objectively great end market,” Imbro told MarketWatch.
Standard Chartered’s 14 recession indicators
The US may not officially be in a recession yet, but Standard Chartered is keeping its eye on 14 indicators, including jobs data, consumer spending, business sentiment and yield curves. “Positioning and sentiment remain bearish, which, as a contrarian signal, could help extend the recovery in risk assets in the near term. The bigger question: Is this rebound sustainable?” wrote Standard Chartered analysts in a note seen by CNBC.
Atlas Air buyout talks
The Atlas Air [AAWW] share price was flying high on Monday, soaring to its best level since March. It followed a report by The Wall Street Journal that the holding company for freight and charter passenger services could be bought by an investment group led by Apollo Global Management [APO]. Atlas Air, which currently has a market cap of $2.4bn, may provide more details on its Q2 earnings call this Friday.
Taylor Wimpey on shaky ground
Amid a slowing UK housing market, housebuilder stocks are on wobbly foundations. The Taylor Wimpey [TW.L] share price may have gained a little over 4% in the last month, but it’s down 30% year-to-date and is 16% above its 52-week low set on 11 July. Half-year results are likely to show a drop in completed builds. It previously indicated that it’s hoping to achieve operating margins of between 21–22% in the medium term.
Investec Wealth’s Stacey Parrinder-Johnson on navigating times of crisis
In issue 14 of Opto magazine, we sat down with the CIO of Investec Wealth and Investment Management to discuss how the firm’s investment strategy is shifting during the broad market downturn. To Parrinder-Johnson, its long-term (18 months of more) high-equity approach is what gives the firm alpha when investing across 83 different investment themes, such as the energy transition.
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