It’s been an exciting 2021 in the US stock markets. We’ve seen repeated all-time highs, sector rotations, and earnings results that have beaten expectations. This, against the backdrop of a global economy trying to get back to normal after last year’s lockdowns.
We’ve also witnessed supply chain disruptions, inflation, and uncertainty surrounding new virus variants. All of the above have contributed to volatility in asset prices, which means more opportunities for market participants. As we head into the tail end of 2021, what US stocks should you be looking at in order to cover various potential market scenarios? At HYCM, we’ve selected three stocks that we believe could perform well in the following circumstances:
- Biden’s $1 trillion dollar infrastructure plan
- Further restrictions in the event that virus variants worsen
- A solid “safe haven” stock with both upside potential and the ability to hold firm throughout difficult market conditions.
General Electric
GE hasn’t been one of the success stories of this year’s bull market in US equities. In fact, it’s currently trading lower than even its pre-pandemic highs in February 2020. However, with President Biden’s $1 trillion infrastructure bill now almost a foregone conclusion, many investors are looking for the stocks that are likely to outperform as this money finds its way into the economy.
General Electric stock, daily chart: Will it benefit from the Biden infrastructure bill?
With $73 billion earmarked for modernising the country’s electricity grid, and an ambitious plan to greatly reduce the country’s emissions by 2030, GE’s $16 billion renewable energy division could be about to receive the boost the company has been lacking in recent years.
An early pandemic winner last year as new users flocked to the social media platform for ideas on everything from home décor to baking, Pinterest has been one of the worst-hit tech stocks in this most recent rotation. A disappointing earnings season in which both year-over-year and quarter-over-quarter monthly active users in the US have declined, led to a big sell-off following the company’s earnings announcement.
Pinterest stock, daily chart: Dip-buying opportunity?
The stock has shed a quarter of its value in July alone, with an 18% drop following its earnings call. Currently trading at $57 per share, it is 36% down from its peak in mid-February at around $89. Despite the drop in new users, the company’s revenues are still growing due to having doubled its average revenue per user over the past year. As a buy-the-dip tech play or a hedge against further pandemic-related disruptions, Pinterest could be a good stock to add to your portfolio, especially at these discounted prices.
Apple
By now Apple is so well-established that it’s much more than just a risky, high growth tech name. It’s also a company that investors find stability in, and are normally invested for the long-term. Despite its youthful styling, Apple remains one of the largest and most solid US companies. It’s also a company that does right by its shareholders, having returned more than $500 billion to them since 2012.
Apple Stock, Daily Chart: Looking bullish despite post-earnings sell-off
Unlike Pinterest, Apple recently smashed through its Q3 earnings estimates, but just like Pinterest, it was punished for it all the same. The post-earnings sell-off, while not as pronounced as what
other tech names have experienced this earnings season, still caused Apple stock to trade more than 4% off its pre-earnings level.
Apple has performed incredibly well this year but has not really been rewarded for its efforts. The company’s stock is currently trading just around its February 2021 highs. Investors who’ve been looking for a point to buy in may have found it during this recent sell-off. Those with the patience to wait a little longer on the sidelines may receive an even better buying opportunity.
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