Market trends to watch out for in The Big Apple.
New York: Wall Street was generally calmer in 2014 than in previous years, but that doesn't mean the stock market was devoid of drama.
Big selloffs in biotechnology and social media stocks had strategists predicting doom in the spring, and the plunge in oil prices has clouded the outlook for the coming year. It was a year when Cynk Technology, a development-stage company with no revenue, was briefly worth $6 billion, and when a long-forgotten closed-end fund focused on Cuba -- the Herzfeld Caribbean Basin Fund -- saw more trading in one day in December than it had in six years.
Reuters asked Wall Street strategists a few questions on odd things to watch for in 2015.
The big Apple
Shares of Apple, the most valuable publicly traded US company, will finish higher for a sixth straight year. With a current market value of about $663 billion, if one were to pick a company that would be the first to hit $1 trillion in value, Apple's a safe choice -- but not next year, investors said. The iWatch may not be enough to propel the stock further.
"I don't really see this company as having another blockbuster category of products. The watch doesn't feel like a great idea. I'm kind of out of the Apple mystique thing," said Kim Forrest, vice president and senior analyst at Fort Pitt Capital Group in Pittsburgh.
With its gains on Friday, the Nasdaq Composite Index sits just about 200 points shy of the vaunted 5,000 level, which it has not seen in nearly 15 years -- and its all-time intraday high of 5,132.52 reached on March 10, 2000, isn't far off.
"I think Nasdaq will test and probably achieve higher highs than we did in 2000 because I think we're in a secular bull market that has another eight to 10 years left to run," said Jeffrey Saut, managing director at Raymond James & Associates.
For the Nasdaq to hit 5,000, it would take a gain of four per cent. And to get to that all-time high, it would take about a seven per cent increase. Whether that's warranted is something over which investors disagree.
"What we need now is for fundamentals like revenue and earnings to catch up with current valuations," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
More trading events expected
After a series of operational glitches in recent years, investors are bracing for more such events.
This year, a gold-mining exchange-traded fund, Market Vectors Gold Miners ETF, dove 10 per cent in the waning seconds of trading one day in early December. Earlier in the year, high-frequency trading firm Virtu Financial cancelled an initial public offering after the release of Michael Lewis' book Flash Boys brought negative publicity to computerised trading.
None of these incidents were as damaging as the May 2010 'flash crash'. The most notable in 2014 came out of the bond market in mid-October, when 10-year Treasuries yields crashed more than 0.3 percentage point without warning.
"There will be an event. At least one, probably more," said Joe Saluzzi, co-manager of trading at Themis Trading in New Jersey. "Whenever you have systems talking to each other, problems happen. They're tested robustly but not for every boundary condition," said Forrest of Fort Pitt Capital.
Investors worry that biotech stocks will have a tougher start to the year after pharmacy benefits manager Express Scripts dealt a blow to Gilead Sciences on December 22 when it dropped coverage of Gilead's hepatitis C treatment.
Biotechs were at the forefront of the selloff in momentum favourites in the spring, and hit another rough patch in December on the Gilead news.
Copyright 2014 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. ( Syndigate.info ).
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|Publication:||Khaleej Times (Dubai, United Arab Emirates)|
|Date:||Dec 27, 2014|
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