Cash, you are no longer king. Long live stocks. <\/p>\n
That\u2019s our call of the day<\/strong> from Barclays strategists who have switched their fealty from one of the year\u2019s most popular investment choices to equities. <\/p>\n \u201cAfter two straight quarters recommending cash over stocks and bonds, we now expect equities to eke out high single-digit returns in 2024 and outperform core fixed income,\u201d a team led by Ajay Rajadhyaksha, global chairman of research at Barclays, told clients in a note Thursday. U.S. and European stocks, specifically, should enjoy those returns even if bond yields stay elevated, they say.<\/p>\n Yields on short-term instruments like 3-month bills Apart from Barclays (as far back as late 2022), hedge-fund billionaire Ray Dalio and DoubleLine Capital\u2019s Jeffrey Gundlach have also been touting the benefits of \u201cT-bill and chill\u201d this year, and millionaires and individual investors have heeded that advice.<\/p>\n But Rajadhyaksha and his team say it\u2019s \u201ctime to take some risk\u201d and investors can do better than that 5%. <\/p>\n So why not bonds? The Barclays team explained that the argument against that asset class has been clear \u2014 too many pricing in imminent interest rate easing and not understanding U.S. fiscal challenges. <\/p>\n Read: <\/strong>Stock and bond investors are convinced the Fed is finished with rate hikes. Why it isn\u2019t a done deal.<\/p>\n And:<\/strong> Hedge-fund manager Harris Kupperman says clamor for bonds, Treasury bills makes no sense<\/p>\n Stocks were a tougher call and against expectations, higher interest rates have not led to lower price\/earnings multiples, outside of a brief period in October, they say. An improved economy and hopes for AI-driven revenue and earnings have instead pushed stock gains, as a recent surge has also left the S&P 500 Rajadhyaksha said they still think double-digit S&P earnings growth forecasts for 2025 are too optimistic, but global economic downside risks have \u201cdiminished greatly. We think stocks will benefit from a fairly benign bottom to this business cycle and look through near-term earnings disappointments,\u201d he said. <\/p>\n Overall the landscape is challenging, says Barclays. \u201cIn general, we do not see an asset class that is compellingly priced right now, whether extremely cheap or ridiculously rich,\u201d said the team.<\/p>\n When it comes to where investors should put money in U.S. stocks, they admit megacap tech has gotten crowded, but that the market may not broaden out as long as tech high fliers are getting the only upward revisions by Wall Street. They suggest investors pick through discretionary names given the sector is under-owned and say outperformance for service-oriented stocks is likely. They like energy for valuation, capital return focus and the supply-driven upside potential for oil.<\/p>\n \u201cWe favor large cap over small cap to hedge against market shocks and for an uncommon opportunity to gain simultaneous exposure to quality,\u201d add Rajadhyaksha and the team, who also like value over growth based on high real rate exposure and low international sales exposure.<\/p>\n Read: Options traders are piling into bullish bets on small-cap stocks at a record pace<\/strong><\/p>\n The Barclays team suggests investors steer clear of China stocks, saying it\u2019s better to \u201cmiss the first 10% of any prospective rally and buy only if there\u2019s evidence that growth is picking up and retail investors on the mainland are buying into the rally.\u201d But they do like the potential for Taiwan stocks given three tailwinds \u2014 signs of bottoming in China, waning geopolitical headwinds and signals of easier U.S.-China relations. <\/p>\n <\/p>\n Stock futures YM00, BX:TMUBMUSD02Y<\/p>\n BX:TMUBMUSD30Y Walmart Applied Materials Read:<\/strong> Target\u2019s stock is soaring, but investors are closely watching the retail sector\u2019s profit<\/p>\n Cisco shares Alibaba Other U.S.-listed China stocks \u2014 Nio Weekly jobless claims, import prices and the Philly Fed manufacturing survey are all due at 8:30 a.m., followed by industrial production at 9:15 a.m., then a home builder confidence index at 10 a.m. <\/p>\n It\u2019s also a busy Fed day: including Cleveland Fed President Loretta Mester at 8:30 a.m., New York Fed President John Williams at 9:25 a.m., Fed Gov. Christopher Waller at 10:30 a.m., Vice Chair for Supervision Michael Barr at 10:35 a.m., and Fed Gov. Lisa Cook at 11 a.m. <\/p>\n Read:<\/strong> \u2018The math all too often just doesn\u2019t work\u2019: Richmond Fed president on the trouble with U.S. housing market<\/p>\n A secretive hedge fund tycoon is the world\u2019s greatest shipwreck hunter<\/strong>.<\/p>\n 3 reasons why millions of older Americans live in poverty and aren\u2019t getting the help they need.<\/p>\n The chairman of the FDIC denied being investigated, and then changed his testimony.<\/p>\n Who were the big buyers of Tuesday\u2019s stock rally? Vanda Research says institutional buyers stepped in for fatigued retail traders, specifically \u201csystematic strategies being forced to cover their short positions.\u201d <\/p>\n <\/p>\n Systematic traders make use of factors such as quantitative models, historical data and technical indicators to figure out when to get in and out of trades. The Vanda team also says discretionary hedge funds\u00a0have also been buying up some excess tech stock supply out there, and that may also help draw in retail investors ahead of seasonal tailwinds.<\/p>\n These were the top-searched tickers on MarketWatch as of 6 a.m.:<\/p>\n \u201cPing you\u201d and more Gen Z slang driving everyone else nuts.<\/p>\n That scannable Spotify tattoo seemed like a good idea at first.<\/p>\n Horse on a plane? Maybe not such a great idea.<\/p>\n
\n BX:TMUBMUSD03M
\n have been north of 5%.<\/p>\n
\n SPX
\n above Barclays\u2019 year-end forecast of 4,200. <\/p>\nThe markets<\/h2>\n
\n ES00,
\n
\n
\n are flat to lower, with tech
\n NQ00,
\n
\n leading the downside. Treasury yields
\n BX:TMUBMUSD10Y<\/p>\n
\n are falling across the board.<\/p>\nThe buzz<\/h2>\n
\n WMT,
\n
\n stock is down nearly 5% in premarket trading after the retailer just beat forecasts on earning and revenue, but its full-year earnings expectations fell short. Elsewhere, Macy\u2019s stock
\n M,
\n
\n is climbing after a big earnings beat and a higher full-year outlook.<\/p>\n
\n AMAT,
\n
\n and Ross Stores
\n ROST,
\n
\n are due to report after the close.<\/p>\n
\n CSCO,
\n
\n are sinking after the networking group cut its earnings outlook, though that shouldn\u2019t necessarily knock out the tech party, says MarketWatch\u2019s Therese Poletti.<\/p>\n
\n BABA,
\n
\n just released results showing it beat on the top and bottom lines in the third quarter,but it won\u2019t proceed with a spin off of its cloud unit, given U.S. restrictions on export of advanced computing chips.\u00a0Shares are down 5%.<\/p>\n
\n NIO,
\n
\n XPeng
\n XPEV,
\n
\n Li Auto
\n LI,
\n
\n \u2014 were dropping given disappointment surrounding the meeting between President Biden and China President Xi. <\/p>\nBest of the web<\/h2>\n
The chart<\/h2>\n
Top tickers<\/h2>\n
\n
\n \n Ticker<\/p>\n<\/td>\n \n Security name<\/p>\n<\/td>\n<\/tr>\n \n \n TSLA,
\n \n Tesla<\/p>\n<\/td>\n<\/tr>\n \n \n NVDA,
\n \n Nvidia<\/p>\n<\/td>\n<\/tr>\n \n \n BABA,
\n \n Alibaba<\/p>\n<\/td>\n<\/tr>\n \n \n AAPL,
\n \n Apple<\/p>\n<\/td>\n<\/tr>\n \n \n AMC,
\n \n AMC Entertainment<\/p>\n<\/td>\n<\/tr>\n \n \n NIO,
\n \n Nio<\/p>\n<\/td>\n<\/tr>\n \n \n GME,
\n \n GameStop<\/p>\n<\/td>\n<\/tr>\n \n \n AMZN,
\n \n Amazon.com<\/p>\n<\/td>\n<\/tr>\n \n \n PLTR,
\n \n Palantir Technologies<\/p>\n<\/td>\n<\/tr>\n \n \n MSFT,
\n \n Microsoft<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Random reads<\/h2>\n