Here's our daily list of stocks that have been identified as being potential buys. If the overall market continues higher, these stocks should outperform:
*Buy and Sell signals are not recommendations and are a starting point for further analysis.
U.S stock indexes this morning are weaker on concern a worsening of the pandemic could lead to more restrictive and prolonged lockdowns that undercut economic growth and corporate profits. President Biden late Thursday warned that the U.S. faces a "dark winter" as the pandemic worsens before it improves and that another 100,000 U.S. Covid deaths are expected over the next month.
Negative carry-over from a slide in European stocks is also weighing on U.S. stock indexes. The Euro Stoxx 50 tumbled to a 2-week low today after the German government cut its 2021 GDP estimate to 3.0% from a 4.4% projection in October, citing extended lockdowns place in place to slow the spread of Covid.
Weighing on the overall market today is a -10% slump in International Business Machines (IBM) after the company late Thursday reported that Q4 revenue fell -6.5% to $20.4 billion, weaker than the consensus of $20.75 billion. Also, Intel (INTC) is down by more than -7% today after CEO Gelsinger said the company has recommitted to manufacturing its own semiconductor chips. The statement disappointed the market as Intel's manufacturing technology has fallen behind Taiwan Semiconductor Manufacturing Co, which makes chips for many of Intel's rivals. There are concerns that if Intel cannot catch up to the better technology, its products will become less competitive and it could lose sales and market share.
Weakness in energy stocks is another drag on the overall market as crude oil prices have fallen to a 2-week low today on energy demand concerns.
A bearish factor for stocks is the worsening Covid pandemic, which is forcing countries to tighten lockdowns that undercut economic growth and corporate profits. Globally, Covid infections have risen above 98.204 million, and deaths have exceeded 2.103 million.
U.S. stock indexes recovered from their worst levels today on stronger-than-expected U.S. economic data. The U.S. Jan Markit manufacturing PMI unexpectedly rose +2.0 to 59.1, stronger than expectations of -0.6 to 56.5, and the fastest pace of expansion since the data series began in 2007. Also, Dec existing home sales unexpectedly rose +0.7% to 6.76 million, stronger than expectations of a decline to 6.56 million.
The VIX S&P 500 Volatility Index ($VIX) this morning is up +1.06 at 22.38, rebounding from Thursday's 3-week low of 21.09. The VIX is down sharply from last March's 12-1/4 year high of 85.47 but is holding above the late-November 10-1/2 month low of 19.51.