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Economic Predictions: Will 2021 be a Boom or a Bust?

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  • (1:00) - What To Expect From The Stock Market Heading Into 2021
  • (7:50) - Should Investors Be Concerned About A Recession?
  • (11:45) - Breaking Down The United States Stimulus Package
  • (19:15) - Unemployment and Small Business Aide
  • (29:10) - Are We Reaching The Top Of The Stock Market?
  • (36:00) - What Stocks Should Investors Keep Their Eyes On?
  • (45:20) - Episode Roundup: WSBC, CMA, PXD, AMZN, AAPL, NVDA, GOLD

 

Welcome to Episode #253 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

This week, Tracey is joined by Zacks Chief Equity Strategist, and a PhD economist, John Blank, to do their annual look at the US economy heading into the new year.

Congress finally passed another large aid package which will backstop parts of the economy hit by the coronavirus shutdowns and restrictions.

But even with the aid package, there’s still a worry about the large number of people who remain unemployed.

Could there be a recession in 2021?

Or will there be a boom like everyone is predicting after the vaccine rolls out and restrictions are lifted?

Is the FAANG Rally Over?

For stock investors, 2020 turned out to be a great year as long as you didn’t panic at the start of the pandemic.

But after the big rally in 2020, especially among FAANG and FANGMAN, where should investors be looking in 2021?

Many of the big cap favorites like Amazon (AMZN - Free Report) have stalled out the last 3 months of the year after furious rallies during the beginning of the pandemic.

Amazon shares are up 72.6% year-to-date and have a forward P/E of 92.

Do they have further upside in 2021?

Energy, Banks and Gold

Three areas investors might want to take a look at in 2021 are the regional banks, the oil stocks and the big gold miners.

1.       WesBanco, Inc. (WSBC - Free Report) is a $1.9 billion regional bank headquartered in West Virginia. It’s paying a dividend yielding 4.4%. While it’s rallied 36.6% over the last 3 months, it’s still down 24.5% year-to-date.

2.       Comerica Inc. (CMA - Free Report) is a large Texas and Michigan regional bank with a market cap of $7.5 billion. If you’re making a recovery bet, no place better than to bet big on Texas. Shares have jumped 40.5% in the last 3 months but remain down 24.3% year-to-date. It also pays a dividend, currently yielding 5.2%.

3.       Pioneer Natural Resources (PXD - Free Report) is one of the large oil and natural gas exploration companies with a market cap of $17.8 billion. It also has one of the best balance sheets in the industry. Shares are up 20% over the last 90 days but remain down 27% year-to-date. Will energy see a further boost in 2021?

4.       Barrick Gold Corp. (GOLD - Free Report) is one of the large gold miners. With the price of gold weakening over the last 3 months, so have shares of Barrick. They’re down 20.5% during that time. Is this a buying opportunity heading into the new year?

What else should you know about the economy and investing in 2021?

Listen to this week’s podcast to find out.

[In full disclosure, Tracey owns shares of AMZN in her personal portfolio.]

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