Wall Street Strategies
Hello! Sign in or Register


Morning Commentary

HIGH HOPES 2021

By Charles Payne, CEO & Principal Analyst
1/4/2021 9:25 AM

Question of the Week

What are you expecting from the market in 2021?

Post your answer below.

The market finished 2020 on a decidedly more cautious note than it spent most of the year that saw mind-boggling gains for the NASDAQ, strong gains in the S&P 500, the Russell 2000, and pedestrian gains in the Dow Jones Industrial Average (DJIA).


The market finished the year with the greatest number of winners. Still, nearly 40% of the market closed down for 2020. But the trend improved in the last quarter and the average gain took off, and that is very encouraging - 302 winners with an average gain of 31.6%.

But 2020 was a tale of two markets before and after March 23. 

Measuring the market from the March 23 lows, it was one of the best rebounds ever. Add in sizzling investment niches and themes,  it felt like there were fireworks each session, especially in the public offering arena.

My Beautiful Balloon

It was up, up, and away for the Initial Public Offerings (IPOs) market (traditional and Special Purpose Acquisition Companies (SPACs)). Most stumbled into the end of the year, and that’s great news. 

Still, it was interesting that some of those hot storylines cooled ahead of the Times Square Ball’s lonely descent, including those sizzling IPOs.  

There is no doubt these names got ahead of themselves, but the question remains: which IPO names will regain equilibrium and turn higher, especially with another batch of hot new issues in the queue?   Several high-profile or super-hot offers slumped into the end of the year, well off their highest level.

One moral of the story is do not chase these bad boys unless you are nimble. The more important development is that some are moving into a fresh long-term investing range.

Earnings releases will inform from here on out, in addition to individual challenges, like beating back short attacks, as several names are under the microscope with calls for massive declines (see Fubotv (FUBO)).

Out with a Whimper

2020 High

2020 Close

2020 % Change

Airbnb (ABNB)

$174.97

$146.80

+116%

DoorDash (DASH)

$195.50

$142.75

+40%

Palantir Tech (PLTR)

$33.50

$23.55

+225%

Unity Software (U)

$174.94

$153.47

+195%

Snowflake Inc (SNOW)

$301.56

$281.40

+135%

C3Ai Inc (AI)

$183.92

$138.75

+230%

Lemonade Inc (LMND)

$137.30

$122.50

+322%

Fubotv (FUBO)

$62.29

$28.00

+180%

 

There was a niche of hot IPOs that got very little media coverage despite science and discovery being a hallmark of 2020. Biotechnology and Health Care IPOs rocked without any fanfare while representing great hope for improved wellness for mankind.

I admit finding biotech winners is tough for me, as there are factors unique to the sector.  Without a doubt, it’s the hottest area in the market that never gets discussed. There is a race on Wall Street for the best names, resulting in monster payouts to analysts with tight relationships with companies going public or looking to raise money.

That was one of the characteristics of the tech bubble. While I am not saying this is a repeat when it comes to excesses, perhaps too many folks are focused on Snowflake (SNOW).

Seer, Inc (SEER)

195%

Olema Pharmaceuticals (OLMA) 

153%

Codiak BioSciences (CDAK)

115%

Kymera Therapeutics (KYMR)

210%

Sigilon Therapeutics (SGTX)

167%

Praxis Precision Medicines (PRAX)

190%

Pulmonx Corp (LUNG)

263%

Aberdeen Standard Cash Creation (ABCC)

101%

Silverback Therapeutics (SBTX)

121%

Targa Resources (TARS)

158%

Greenwich LifeSciences (GLSI)

534%

908 Devices, Inc (MASS)

185%

Alterity Therapeutics (ATHE)

101%

Eargo, Inc (EAR)

149%

PMV Pharmaceuticals (PMVP)

242%

Oncorus, Inc (ONCR)

115%

 

Investable 2021 Themes

I outlined these themes in my special 26-page Payne’s Perspective (ask your rep for a copy or research@wstreet.com).

Data

·         Communication services (XLC)

·         Software (Software-as-a-Service (SaaS) and Salesforce (CRM))

·         Semiconductors

Drones

Environmental, Social, and Corporate Governance (ESG)

·         Electric Vehicles (EV)

·         Solar

Industrial Metals

Farm Economy 

There are other hot areas in the market, including Bitcoin, but these require nimbler investment abilities and wider tolerance for risks and volatility.

Portfolio Approach

We are fully vested in our Hotline Model Portfolio.

Today’s Session

The markets are starting the New Year with some of the same themes as 2020.  The futures are pointing to a positive open.  The greenback is down again. Momentum continues, and Tesla (TSLA) is rocking on news of record Q4 deliveries. 

Expansion in manufacturing is continuing around the globe.  Here are home, we will get IHS Markit Manufacturing data at 9:45a ET and Construction Spending at 10a ET.


Comments
market higher

RICH mouser on 1/4/2021 9:51:22 AM
I expect phenomenal growth in trend sectors- EV, Blockchain, Biotech, AI, and alternative energy. Normal growth in manufacturing, communications and consumer discretionary until we see a complete reopening of the blue states. I see the market as a stock picker's market and you Charles are one of the best!
Good luck in 2021.

Jeff Kirk on 1/4/2021 10:15:08 AM
The S&P 500 P/E ratio (Price to Earnings) is now at around 22. The long term average is around 15-16ish. It looks like a reset is in order, probably during this year.

Tom Lynn on 1/4/2021 10:23:06 AM
Expect the broader market to go up in the 8-10 % range

small growth caps higher than that

technology and semi conductors still fly
as well as communications
value stocks will stage a rebound but fizzle out.

overall markets up unless gov't both here and abroad do not get in the way

James Cuff on 1/4/2021 10:25:36 AM
Expect Infrastructure Stock to come alive and exceed all expectations in 2021.

LYLE HOWELL on 1/4/2021 10:31:30 AM
If the Republicans loose power in the senate, You can forget about making money in the old standards, except for the "Greenies".

Mike Moule on 1/4/2021 11:24:54 AM
i think the market will continue to go up despite bidens presidency.trump has put so many great things in motion that unless biden willfully went out and tried to stop it it will go up despite his becoming president..if you look at the actions of the fed and the unemployment numbers for biden to start screwing around would be seen as antiamerican in order to help china..now we know china already has biden in his pocket but this would be the solid proof of it..earnings are coming now off of much reduced numbers and most companies are able to at least comply or beat their outlook....so in closing 2021 should at least be upbeat for the first half of the year

david on 1/4/2021 1:31:57 PM
Remember Clinton's ( Bill) sign over the door way? " It's the economy stupid!" Well President Trump gave us a super economy with jobs, border integrity, excellent improved trade deals, strong military, so now the fickle American left can drive off the cliff for the open border, no defense, make China rich again, green deal! It's amazing we still have a country.

Lorin K on 1/4/2021 2:03:07 PM
Thank you WSS and I intend to make entry soon. The expectation hasn’t been matched by the preparation...Charles and Cecil you’re still the best!

Kevin O. Grier on 1/4/2021 3:18:13 PM
Markets will be down With a liberal government watch out.
I am curious how Gold will do?

S Green on 1/4/2021 9:02:24 PM
My fair share of course!

Joe Mangarella on 1/5/2021 9:42:36 AM
What I expect for 2021 is that it's going to make 2020 look like a good year. In 1776, our Founding Fathers risked everything to begin a country based on representative government, and this election proved that representative government is no longer the law of this country. We are all going to have to get used to the fact that half the country will not accept a Socialist economic system.

Joyce B. on 1/7/2021 2:16:01 PM
How can the market Continue to climb when we KNOW that the Biden economic plan will crush tge middle class?

Nick Romano on 1/8/2021 12:20:59 PM
I am a new member and initially being confused by the terminology and process of buying and selling, but I am here to compliment you on your employee Jason Maeroff. He was able to explain things to me so clearly and expeditiously that I am now ready to move forward with the PPP and maybe even Swing Strategy levels with confidence. Thank you Jason!!!

Cyndi Miano on 1/12/2021 5:10:08 PM
EXCITING, BUT STORMY.

Ed Summerlin on 1/17/2021 12:50:23 PM
I expect the market to continue to search for direction for about the first quarter. Bank stocks should be better with higher interest rates since we all know inflation not far behind. Oil stocks should do well since the prices for oil will continue to go higher. Bitcoin on the other hand is a real question. The nice thing about bitcoin is you don’t have to worry about it reporting a bad quarter or something happening to key personnel.

Emmett on 1/18/2021 10:08:33 AM
Thanks Emmett Banks "should" be better. Oil "could" go higher. Bitcoin "might" go to $1,000,000 like Howard Cosell said that's why they play the game or in this case why they trade markets.  CP

Charles Payne on 1/18/2021 11:03:16 AM
 

Add Your Comment


Submitted comments are subject to moderation before posting.


Home | Products & Services | Education | In The Media | Help | About Us |
Disclaimer | Privacy Policy | Terms of Use |
All Rights Reserved.