5 Stock Market Predictions for the Second Quarter

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We’re three months into the year, and as we move into the second quarter, here’s how a few of my Top 10 Stock Market Predictions for 2019 are panning out so far. Then, I’ll add a couple more to the list:

Stock Market Predictions: Uber and Lyft Go Public … And Disappoint

To my first point, Lyft has indeed gone public. LYFT stock began trading at $87.24 on the Nasdaq under ticker symbol “LYFT.”

Right now, I’m interested in Lyft to the extent of its role in the revolutionary potential of “robo-taxis.”

But looking at its financials, the company is moving further into the red, even though revenues have doubled. Earlier this month, Lyft reported 2018 revenues of $2.2 billion (versus $1 billion in 2017), but net losses continued to increase to -$911 million (vs. -$688 million in 2017).

The question is, will the company ever be profitable? I am 50/50 on that answer. But what I do know is that the company will not be profitable any time soon.

This situation still very much reminds me of Facebook (NASDAQ:FB). I avoided FB stock for its first few months, until it got down to the teens — and I am taking the same view with LYFT.

Lyft stock is a strong “avoid” when it begins trading. By the end of the second quarter, when it will have 13 weeks of trading under its belt, we will know how accurate my prediction will be.

Stock Market Predictions: Microsoft (MSFT) Will Join the $1 Trillion Club

Just three months into 2019, Microsoft (NASDAQ:MSFT) stock has a roughly $900 billion market cap. At this rate, it could hit $1 trillion by mid-year.

MSFT was up 16% in 2018 (versus the 6% decline in the S&P), and it hit a new all-time high last week. I am doubling down on Microsoft as the next $1 trillion company.

Stock Market Predictions: Oat Milk Will Become the New Almond Milk

This one was my final entry when I made my original predictions in December, and it was kind of a funny way to wrap up the list. But, at the same time, I felt the odds were good.

And just this month, Starbucks (NASDAQ:SBUX) announced it is starting to roll out oat milk at five of its “Starbucks Reserve” locations in San Francisco, New York and (naturally) Seattle. These locations are “a place to experiment” with new offerings before a potential nationwide rollout, just as cold brew was.

The only thing missing is the stock to take advantage of this correct prediction.

Now, on a broader note, here are two more predictions:

Stock Market Predictions: The United States Is Not Going Into a Recession

When the yield curve became inverted — as the yield on the three-month Treasury ticked higher than the yield on the 10-year Treasury — it made for a great headline in the financial media. And the talking heads started to scream the “R” word: recession.

Remember that a recession is two consecutive quarters of negative growth — that is not happening this year. Bottom line!

And for context, there are a ton of short- and long-term interest rates out there. To me, the relationship between the 10-year and 30-year yields is more important. That curve has not inverted. In fact, just the opposite. The spread between the two has increased, which is very healthy.

I also watch the two-year and 10-year yield curve, and this has not inverted either. Interestingly enough, the last five times it has inverted, the S&P 500 continued higher and peaked 19 months later. If that scenario happened today, we’d be looking for a peak in October 2020.

There’s a lot of money to be made in that time. The mean return from when the two-year/10-year relationship inverted to the market peak is 22.3%.

Now is not the time to get all defensive.

Stock Market Predictions: Emerging Markets Will Rally

With the Fed saying that it will not raise interest rates in 2019, yields will remain low here…and that is good news for emerging markets.

Most emerging market companies will borrow money in U.S. dollars and repay the debt in their local currency. Lower rates are better for emerging market companies and the more dovish Fed had helped the emerging markets index rise by 9% this year. After a rough 2017, I believe the rally has just begun.

And those three areas are the most attractive for big gains this year. Now, these regions do have political risks above the average. So, weigh the potential for outperformance carefully. But I suspect that, ultimately, 2019 will be another “day in the sun” for emerging markets.

Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you’re interested in making triple-digit gains from the world’s biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today.


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