Year-End Market Outlook: Navigating the Chop on the Road to S&P 7000
The HCM-BuyLine® is positive, and all pullbacks should be considered buyable. Look for a little bit more chop over the next few weeks. There are only about 6 weeks left in the trading year, and we still see the S&P 500 closing above 7000.
The Invesco KBW Bank ETF (KBWB) is also forming a shallow base with a buy point of 80.04 for now. A sharp pullback earlier this year undercut the lows of a prior base, which served to reset the base count. The fund has risen by just over 18% so far this year, which means it is slightly outperforming the S&P 500. The fund aims to match the performance of the KBW Bank Index. This is a benchmark stock index for the banking sector. It is made up of large U.S. national money center banks, regional banks, and thrifts.
Vertiv (VRT) provides equipment and services for data centers; it manufactures power and thermal management devices, as well as hardware and software. On October 23rd the company announced a 46% jump in third-quarter profit, to 76 cents a share, thanks to the strong AI data center business. Revenue accelerated for a second straight quarter, up 19% to $2.07 billion. Gross margin hit 38%, the highest in at least four quarters. On July 30 the firm reported a 42% increase in EPS to 95 cents as revenue climbed 35% to $2.64 billion. It also guided full-year earnings of $3.80 a share on sales of $10 billion, which was better than analysts expected at the time.
(HWM) Howmet Aerospace provides advanced engineering solutions for the aerospace and transportation industries. It operates in four segments: Engine Products, Fastening Systems, Engineered Structures and Forged Wheels. The company shows a consistent record of earnings and revenue growth. Boeing is a big customer. Annual earnings estimates look solid, with full-year profit expected to rise 35% this year to $3.63 a share and by a further 19% next year.
