Speculative, expensive and downcast – the new stock market leadership
Mid-June marked a turning point for the stock market and new leadership emerged for the recent surge, according to Credit Suisse.
The driving returns were speculative stocks (high correlation with Bitcoin (BTC-USD)), Expensive (high P/E), Beaten (lower over 52 weeks), Volatile (strong correlation with falling VIX (VIX)) and strongly shorted.
The S&P 500 (SP500) (NYSEARCA: SPY) is up about 10% since mid-June. During this period, speculative stocks had the best return at an equal weighting of 16.8%, closely followed by expensive stocks, up 16.6%. Beaten Down shares returned 14.6%, Volatile rose 14.1% and Highly Shorted shares returned 10.3%.
“With falling commodity prices and weakening economic data, inflation is expected, based on both breakevens and economists’ forecasts, to decline steadily over the next 24 months,” the analysts wrote. Credit Suisse equity analysts. “We believe this will lead the Fed to move towards more accommodative policy as we head into the end of the year, supporting a continuation of the current market rally and factor leadership.”
Here are the top 50 stocks exposed to these factors:
- Ceridian (CDAY): Spec, Exp, BD, Vol, HS
- American Airlines (AAL): Specs, Exp, Flight, HS
- Generac (GNRC): Spec, BD, Vol, HS
- Carnival (CCL): Spec, BD, Vol, HS
- Caesars (CZR): Spec, BD, Vol, HS
- Etsy (ETSY): Spec, Comics, Vol, HS
- Nowegian Cruise (NCLH): Spec, BD, Flight, HS
- Penn National (Penn): Spec, BD, HS
- Salesforce (CRM): Spec, Exp, BD, Flight
- Intuit (INTU): Spec, Exp, BD, Vol
- Paycom (PAYC): Spec, Exp, BD, Flight
- Las Vegas Sands (LVS): Exp, BD, Flight
- PVH (PVH): Spec, BD, Flight
- Royal Caribbean (RCL): BD, Flight, HS
- Tesla (TSLA): Spec, Exp, Flight
- Wynn Resorts (WYNN): BD, Flight, HS
- DexCom (DXCM): Spec: Spec, BD, Vol
- Cadence Design (CDNS): Spec, Exp, Flight
- Enphase Energy (EPH): Spec, Exp, Vol
- EPAM Systems (EPAM): Spec, BD, Vol
- Fortinet (FTNT): Spec, Exp, Vol
- Monolith (MPWR): Spec, Exp, Flight
- ServiceNow (NOW): Spec, Exp, Vol
- Nvidia (NVDA): Specification, Comics, Flight
- PayPal (PYPL): Specs, Comics, Vol.
- SolarEdge (SEDG): Spec, Exp, Vol
- Synopsis (SNPS): Spec, Exp, Flight
- DISH Network (DISH): Spec, BD, HS
- Warner Bros. Discovery (WBD): Exp, BD, HS
- Albemarle (ALB): Spec, Flight
- Boeing (BA): Exp, BD
- Aptiv (APTV): Comics, vol.
- Bed bath and body work: BD, HS
- Domino’s Pizzq (DPZ): Exp, HS
- Expedia Group (EXPE): BD, HS
- Ford (F): Comics, vol.
- Abiomed (ABMD): Specification, Exp
- IDEXX Laboratories (IDXX): Exp, BD
- Illumina (ILMN): Exp, BD
- MarketAccess (MKTX): Exp, BD
- MSCI (MSCI): Specification, Exp
Find out why the short squeeze trend feels long in the tooth.