๐ฐ Consumer confidence hits a new low; will it influence Trump's policy direction?
๐น $AT&T Inc(T)$/$Verizon(VZ)$/$Southern(SO)$: High-dividend value stocks that offer both offensive and defensive strategies.
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| Market recap ๐น
Last week, hopes for a rebound were dashed, with $S&P 500(.SPX)$ declining 1.5% and $NASDAQ(.IXIC)$ down 2.6%, resulting in significant losses. $Tesla Motors(TSLA)$ rose 6% for the week, standing out as the only winner among Mag7.
$NASDAQ Golden Dragon China Index(HXC)$ fell 3.11%, while $Zai Lab Ltd(ZLAB)$ rose 3%, $Daqo New(DQ)$ increased by 1.3%.
Megacaps - fighting club
IPO faced challenges, with leveraged income models being questioned and the AI computing bubble exposed. $NVIDIA(NVDA)$-backed AI cloud computing firm $CoreWeave, Inc.(CRWV)$ went public at a price of $40 per share, below the expected range, resulting in a valuation drop to $19 billion. On its first trading day, the stock opened down 2.5%, fell over 6% during the session, then rebounded briefly before closing flat at $40.
Not all bad, thou. Once-heat AI babies saw a partial rebound, with the market favorite $AppLovin Corporation(APP)$ recovering its upward momentum, increasing by 4%, and $Quantum Computing Inc.(QUBT)$ rose by 6.4%.
Macro - stagnation
The market is primarily concerned with the reactions as the countdown to the tariff implementation date begins.
The U.S. core Personal Consumption Expenditures (PCE) for February showed a year-on-year increase of 2.79%, but personal spending showed little growth. Due to the impact of tariffs, long-term inflation expectations in Michigan reached a 32-year high, while consumer confidence hit a new low not seen in over two years.
The prosperity of the U.S. stock market is fundamentally supported by strong investor confidence, which leads to sustained capital inflows. However, drastic changes in the policy environment have prompted a significant flight of capital towards safe-haven assets, such as gold and energy.
The weak economic fundamentals may be a key factor forcing Trump to adopt a more conciliatory stance.
Top movers - Biotech, medical
Investors are showing increased interest in the healthcare sector, seeking assets less sensitive to economic growth and fluctuations.
In biotech, tumor drug $ASCENTAGE PHARMA GROUP(AAPG)$ rose by 7.2%, rare disease $Soleno Therapeutics(SLNO)$ increased by 6.8%, and medical technology firm $Pulse Biosciences(PLSE)$ rose by 6%.
Healthcare stocks are doing well, with $Merck(MRK)$ up 1.9%, $AbbVie(ABBV)$ up 1.3%, $Eli Lilly(LLY)$ up 0.1%.
Gold stocks are also shining, seeing $Harmony Gold Mining(HMY)$ up 9.5%, $Gold Fields(GFI)$ up 4.5%, $DRDGold(DRD)$ up 2.7%.
| Back to basics
On Friday, utilities were the only sector to rise, with $Utilities Select Sector SPDR Fund(XLU)$ increasing by 0.74%, marking three consecutive days of gains.
So far this year, XLU has risen by 3%. The utility sector is both offensive and defensive, as it provides essential public services like electricity, natural gas, and water. Utility stocks are typically viewed as defensive assets and stand to benefit from AI advancements, as rising demand for electricity and energy will drive up company valuations.
For risk-averse strategies, it is advisable to temporarily refrain from aggressive allocations.
| Risk-averse
The current upward trend in gold assets presents an investment opportunity.
$AT&T Inc(T)$ ,$Verizon(VZ)$, and $Southern(SO)$ are high-dividend value stocks in the TMT and utilities sectors, demonstrating strong risk resilience and tremendous robustness in adverse conditions.
T - Up 24% YTD, maintaining strong momentum
$AT&T Inc(T)$ is primarily a telecommunications service provider, with core businesses including wireless communication, broadband internet, and television services, while also venturing into media and entertainment.
Investors are cautiously optimistic about the company's long-term strategy. AT&T has announced further investment in its 5G network to enhance coverage and speed to meet the growing user demand.
VZ - PE 10x, seeing 2 weeks of consecutive gains
$Verizon(VZ)$ is a leading U.S. telecommunications company, primarily offering wireless communication services, broadband internet, and video services, with a continuous focus on 5G network development.
Similar to AT&T, Verizon operates wireless telecommunications and wired network services, boasting the highest user base in the U.S.
Verizon originated from the break-up of AT&T Corp. in 1984, formed by Bell Atlantic, which later merged with NYNEX in 1997, resulting in the formation of Verizon.
SO - Rising for 3 consecutive days, up 10% YTD
$Southern(SO)$ is primarily engaged in the utility business for electricity and natural gas, serving several states in the southeastern United States with electricity, gas, and renewable energy solutions.
SOโs stock performance has remained relatively stable, supported by consistent demand in the utility sector.
The company plans to increase investments in solar and wind energy projects to respond to the growing demand for clean energy.
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