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The Zacks Analyst Blog Highlights United States Oil, Lockheed Martin, Tesla, Freeport McMoran and Netflix
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For Immediate Release
Chicago, IL – October 3, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: United States Oil Fund (USO - Free Report) , Lockheed Martin (LMT - Free Report) , Tesla (TSLA - Free Report) , Freeport McMoran (FCX - Free Report) and Netflix (NFLX - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Middle East Tensions Rise: Correction Ahead?
Geopolitical Tensions Rise as Earnings Season Approaches
Stocks swooned Thursday after reports circulated that Iran fired hundreds of rockets into Israel in an apparent escalation of the conflict in the Middle East. Crude oil, which had been down-trending, got a firm bid and was up more than 2% on massive volume. Meanwhile, investors flocked to the United States Oil Fund and defensive stocks such as Lockheed Martin. Following Iran’s aggression, the IDF pre-announced that they would retaliate and potentially target Iran’s crude oil infrastructure.
Earnings Season Approaches
“Earning’s season” usually occurs two weeks after the end of the quarter and refers to when most companies in the major U.S. indices like the S&P 500 Index report earnings. Over the next few weeks, leading stocks such as Tesla, Freeport McMoran and Netflix will report earnings. Often, strong stocks such as these will rally into earnings. However, investors likely have some concerns over the escalating conflicts worldwide. Are investors being too emotional, or should they panic?
“Buy Bombs”
“Buy Bombs” is an old Wall Street saying that illustrates the contrarian nature of markets. Though geopolitical events like 9/11 have caused broad market selloffs, in most instances, stocks sell off in anticipation of the events, and then, when the event finally occurs, stocks rally amid rampant fear. Markets are notoriously manipulative, and though every world citizen should be concerned and market participants should watch for further escalations, geopolitical events are often buyable dips, especially in bull markets (like the one we’re in now).
Market Internals Tell the Story
Savvy investors understand the importance of looking under the hood and beyond the market indices themselves. Late Thursday, the cumulative tick indicator (a technical analysis indicator that assesses overall buying or selling pressure) flipped positive, and down volume was muted (especially considering how weak the major indices were).
In other words, thus far, the market is more robust than it looks. Though the conflict could escalate further, savvy investors understand the benefits of interpreting the action rather than predicting the future.
Will October Bring Tax Selling?
Tax loss harvesting is a procedure implemented by retail and institutional investors to decrease their taxable income by selling investments they are underwater in towards year-end. Often, institutional investors, who comprise the bulk of trading volume, give themselves a buffer and sell their losers in October.
However, thus far, in 2024, U.S. equities are off to one of the best starts in history. Though October can sometimes spell danger like it did in 2023, the S&P 500 Index produced gains of ~8% in 2023 and ~7% in 2021. While some volatility is possible, investors should be open various outcomes in October.
October Seasonality
Regarding seasonality, historical data suggests that analysis of the month of October requires investors to exercise some nuance. October is historically a positive month. That said, during presidential election years (like the one we’re in now), October is down -0.8% on average as investors show skittishness amidst uncertainty.
Bottom Line
With geopolitical tensions rising and tax selling season in full swing, some October volatility is possible. However, the historical reactions to geopolitics and bullish market internals suggest it is too early for investors to panic.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights United States Oil, Lockheed Martin, Tesla, Freeport McMoran and Netflix
For Immediate Release
Chicago, IL – October 3, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: United States Oil Fund (USO - Free Report) , Lockheed Martin (LMT - Free Report) , Tesla (TSLA - Free Report) , Freeport McMoran (FCX - Free Report) and Netflix (NFLX - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Middle East Tensions Rise: Correction Ahead?
Geopolitical Tensions Rise as Earnings Season Approaches
Stocks swooned Thursday after reports circulated that Iran fired hundreds of rockets into Israel in an apparent escalation of the conflict in the Middle East. Crude oil, which had been down-trending, got a firm bid and was up more than 2% on massive volume. Meanwhile, investors flocked to the United States Oil Fund and defensive stocks such as Lockheed Martin. Following Iran’s aggression, the IDF pre-announced that they would retaliate and potentially target Iran’s crude oil infrastructure.
Earnings Season Approaches
“Earning’s season” usually occurs two weeks after the end of the quarter and refers to when most companies in the major U.S. indices like the S&P 500 Index report earnings. Over the next few weeks, leading stocks such as Tesla, Freeport McMoran and Netflix will report earnings. Often, strong stocks such as these will rally into earnings. However, investors likely have some concerns over the escalating conflicts worldwide. Are investors being too emotional, or should they panic?
“Buy Bombs”
“Buy Bombs” is an old Wall Street saying that illustrates the contrarian nature of markets. Though geopolitical events like 9/11 have caused broad market selloffs, in most instances, stocks sell off in anticipation of the events, and then, when the event finally occurs, stocks rally amid rampant fear. Markets are notoriously manipulative, and though every world citizen should be concerned and market participants should watch for further escalations, geopolitical events are often buyable dips, especially in bull markets (like the one we’re in now).
Market Internals Tell the Story
Savvy investors understand the importance of looking under the hood and beyond the market indices themselves. Late Thursday, the cumulative tick indicator (a technical analysis indicator that assesses overall buying or selling pressure) flipped positive, and down volume was muted (especially considering how weak the major indices were).
In other words, thus far, the market is more robust than it looks. Though the conflict could escalate further, savvy investors understand the benefits of interpreting the action rather than predicting the future.
Will October Bring Tax Selling?
Tax loss harvesting is a procedure implemented by retail and institutional investors to decrease their taxable income by selling investments they are underwater in towards year-end. Often, institutional investors, who comprise the bulk of trading volume, give themselves a buffer and sell their losers in October.
However, thus far, in 2024, U.S. equities are off to one of the best starts in history. Though October can sometimes spell danger like it did in 2023, the S&P 500 Index produced gains of ~8% in 2023 and ~7% in 2021. While some volatility is possible, investors should be open various outcomes in October.
October Seasonality
Regarding seasonality, historical data suggests that analysis of the month of October requires investors to exercise some nuance. October is historically a positive month. That said, during presidential election years (like the one we’re in now), October is down -0.8% on average as investors show skittishness amidst uncertainty.
Bottom Line
With geopolitical tensions rising and tax selling season in full swing, some October volatility is possible. However, the historical reactions to geopolitics and bullish market internals suggest it is too early for investors to panic.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.