Betting on the post-pandemic boom? Bank of America has 17 stock recommendations

Here’s a possible all-clear sign. COVID-19 is no longer a “tail risk” for investors, the first time since February 2020, Bank of America says in its latest survey of fund managers. A tail risk is an unlikely event that could cause large losses or gains.

Scroll down to see that graph.

Meanwhile, the Federal Reserve’s two-day policy meeting kicks off on Tuesday, and investors will be on the lookout for any hard-line signs that could depress stocks. The premarket is showing mixed action, although many remain caught up in the idea of ​​a post-pandemic boom, at least in the United States as vaccines roll out.

Read: Value stocks are making a comeback. Don’t be left behind, these analysts say

That has held the records of the Dow Jones Industrial Average DJIA,
+ 0.53%
and S&P 500 SPX,
+ 0.65%
and those actions aimed at recovery. Our call of the day It comes from strategists at Bank of America, offering up to 17 stocks to buy for the three R’s they see coming: recovery, reflation and downgrading.

Strategists Jill Carey, Savita Subramanian and Ohsung Kwon say the economy has reached the mid-cycle phase, where inflation is usually stronger. In earlier phases of this type, excluding the tech bubble, small caps have outperformed larger companies and value has outpaced growth.


The Bank of America team says there are two reasons they like those stocks: Many of the companies that stand out aren’t expensive yet, and active funds aren’t positioning themselves for that rising inflation, with more exposure to megacaps. than those with smaller capitalization.



On stocks (almost half are small and mid-cap companies) …

Alcoa AA,
– BofA has a target share price of $ 37 for the miner. Aluminum prices could go either way, but the growth in global demand is an advantage for Alcoa.

Axalta AXTA coating systems,
– Target share price of £ 37 for the global coatings group. The pace of the car’s recovery will be key and a stronger dollar and lower raw material costs could be a boost.

Broadcom AVGO,
+ 4.34%
– Target share price $ 550. Risks to the semiconductor company include sensitivity to US-China trade relations and competition in networks, smartphones, and other markets.

He is she is,
– $ 95 Stock Price Target. Risks for the energy company include oil and gas prices, as well as slowing drilling progress.

Marriott International MAR,
+ 2.24%
– Target price of the share $ 150. Economic weakness and worse-than-expected spending by companies and consumers are among the risks for the hotel company.

Walt Disney DIS,
– Price target of $ 223 for the entertainment giant with “best-in-class assets.” Downside risks include slowing ESPN’s growth due to people deciding not to maintain a cable TV subscription, lower consumer confidence, and low attendance at theme parks. Also watch out for potential movie flops.

As for the rest, they like CNH Industrial CNHI,
+ 0.59%,
Comcast CMCSA,
+ 0.77%,
Emerson Electric EMR,
Herc Holdings HRI,
+ 1.98%,
KNX Knight-Swift transport,
Occidental Petroleum OXY,
Parker Hannifin PH,
+ 0.75%,
Principal Financial PFG,
Robert Half International RHI,
Union Pacific UNP,
and World Fuel Services INT,
+ 0.08%.

The graphic

Here’s the “tail risk” chart from BofA’s latest monthly survey of fund managers. The biggest risks are higher-than-expected inflation and a bond market “tantrum”.


The markets

YM00 Stock Futures,
+ 0.01%

+ 0.13%

+ 0.55%
they wobble a bit, but European stocks have a higher SXXP,
+ 0.63%.
It was also a positive day for the Asian markets. Elsewhere, CL.1 oil,
and the DXY dollar,
are softer and bitcoin BTCUSD,
it is moving further away from the $ 60,000 hit over the weekend.

The buzz

Retail sales and import prices should be ahead of market opening, followed by industrial production and an index from the National Association of Home Builders. Aside from the start of the Fed meeting, investors will also be watching the outcome of a 20-year Treasury auction.

Ray Dalio, the founder of Bridgewater, the world’s largest hedge fund firm, declares that investing in bonds is “stupid” and investors should stick to a “well-diversified portfolio.”

AstraZeneca AZN,
+ 0.72%

+ 3.54%
shares are higher after Jefferies upgraded the drug company to buy on hold. AstraZeneca has been on the hot bench as several European countries suspend their COVID-19 injections over reports of blood clots from inoculations.

The Finnish telecommunications group Nokia NOKIA,
+ 0.65%

+ 1.90%
is cutting up to 10,000 jobs to save $ 716 million in two years.

A team from the US government’s road safety agency heads to Detroit to investigate a “violent” accident after a Tesla TSLA,
+ 2.05%
The vehicle passed under a semi-trailer, leaving two people seriously injured.

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