Wall Street experienced a rally this morning, buoyed by optimism surrounding a potential trade truce between the U.S. and China. This higher market opening follows an impressive surge in the S&P 500, which hit a record high last Friday. The upcoming week is set to be significant, featuring a slew of earnings reports from several major companies, including many from the so-called “Magnificent Seven.”
Market analysts have identified key beneficiaries in the event of a deal with China. Notable among them are semiconductor exporters, with stocks for companies like Nvidia and Advanced Micro Devices showing gains of over 2%. Additionally, agricultural equipment giant Deere also saw a rise, reflecting positive sentiment among farmers. Conversely, U.S.-listed rare earth miners, such as MP Materials, experienced declines amid expectations that China might refrain from imposing export restrictions.
In analyst commentary, Ben Reitzes from Melius Research touted the custom Tensor Processing Unit (TPU) from Google as a vital asset for Broadcom, boosting his price target for the company to $475 from $415. Google’s parent company, Alphabet, also saw its price target elevated by JPMorgan from $260 to $300, following the lifting of concerns related to antitrust issues from the Justice Department. Analysts suggested these developments point towards potential significant gains.
UBS also raised its price target for Arm, increasing it to $200 from $175 based on predicted strong performance in handset and central processing units ahead of quarterly earnings on November 5. Meanwhile, Guggenheim upgraded Microsoft from a hold to a buy, emphasizing its dominance in the productivity suite market and its advantageous position amid shifts in artificial intelligence.
While traditional markets were buoyant, emerging sectors like quantum computing, represented by IONQ, saw upward trends, alongside nuclear technology stocks such as Oklo. An analysis noted the importance of distinguishing between sound investments and speculative bubbles reminiscent of the 1990s.
In the defense sector, Susquehanna raised its price target on General Dynamics to $406 from $365, reflecting robust Q3 results in business aviation and a strong defense market. Likewise, RBC Capital Markets upgraded Honeywell to a buy rating, highlighting its improving business momentum and the fading concerns over its spin-off strategies, with a new price target of $253 signifying about 19% upside.
Wells Fargo also made adjustments, lifting the price target for TJX, the parent company of T.J. Maxx, Marshalls, and HomeGoods, to $140 from $130. This adjustment came ahead of the company’s earnings report scheduled for November 19. Furthermore, the analysts revisited price targets for competitors in the retail space, raising estimates for Ross Stores while lowering them for Burlington.
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