Bullish investors are looking for strong retail sales data to increase the chances of lower interest rates ahead.
Demand for retail goods is not adding inflationary pressures. This suggests that the Federal Reserve will cut rates by 25 bps when it meets next month.
This week, cautious investors should steer clear of electric vehicle stocks except Tesla (TSLA). Speculators thought that Saudi Arabian investments in Lucid (LCID) would have raised enough cash. Instead, Lucid unexpectedly announced a plan to sell 262.44 million shares. The stock sale raised nearly $1.7 billion but hurt its shareholders.
LCID stock lost 22.37% last week.
Beware of Health Insurers
Managed care stocks are suffering a sell-off that no one expected. Markets are worried that medical costs are rising. This is bad news for CVS Health (CVS), Elevance Health (ELV), and Cigna (CI).
Last week, UnitedHealth (UNH) reported weak Q3 results, hurt by higher medical costs. CEO Andrew Witty issued an earnings guidance for 2025 that is below consensus. Payment cuts to the Medicare program, for example, will hurt results.
In Asia, South Korea, Japan, and Taiwan are growing. China is not. Yesterday, the country issued export rules that would safeguard its national security and interests. The country claimed that it never provided lethal weapons to any party associated with the Russia-Ukraine conflict.
Investors should avoid China-based stocks. This includes the ETF, KWEB, Alibaba (BABA), NetEase (NTES) or Bilibili (BILI).