The job market held up well last year, with unemployment near historic lows. That’s even after rising interest rates weighed on potential economic expansion. And it’s even after many big-cap tech companies announced tens of thousands of layoffs. That trend will likely continue this year. Companies are finding ways to do the same – or more – with fewer employees. Advances in technology such as AI can make that happen. The latest company to announce layoffs isXerox (XRX). The imaging technology company is targeting a 15 percent drop in its workforce this quarter, totaling over 3,000 em...

2023 was a great year for the markets. But behind the headline data, some sectors performed better than others. Most of 2023 followed the narrative of rising interest rates. That weighs on the cost of capital. However, that trend has started to shift in recent months. Interest rates have peaked. And investors are looking toward interest rate cuts in 2024. That could prove a boon for companies that benefit from lower rates, which may be outperformers this year as a result. One area that could fare better is the big banks. While most had a positive return last year, they underperfor...

Markets can often get ahead of themselves, particularly with tech trends. The internet boom of the 1990s led to the creation of many companies, but most of those companies died out before they could become profitable. Today, AI is garnering similar attention. But AI programs can be incorporated into existing companies across a number of sectors immediately. And it can be improved over time. Companies that have started to integrate AI now may see the benefits of that play out this year. For instance, in the insurance industry,Progressive (PGR), is already using AI to improve its polic...

There are many ways to run a business, and just as many ways to get customers to pay. One popular business model is the recurring revenue model. Rather than getting a big one-time payment, and potentially not hearing from a customer again for years, the recurring model offers consistent, if smaller payments. This model has been popularized across a number of industries. The entertainment industry has leaned heavily into it, particularly with streaming services. The leader of streaming,Netflix (NFLX), has fared well with this model. And it’s had success growing subscribers, even after...

While 2023 was the year of AI, the new year brings the opportunity for a new investment idea to take the lead. One potential leader this year is the cryptocurrency space. 2023 ended with the view that the SEC would soon approve a bitcoin ETF. Add in this year’s halving activity, and there could be a massive supply shock that sends bitcoin prices soaring. And where bitcoin goes, other cryptos will follow. That’s why many cryptos soared in the final weeks of last year. But that trend could just be getting started. While it’s getting a little overheated in the short run, crypto-related ...

Every company has some kind of uncertainty surrounding it at some point. The market doesn’t like uncertainty, and will likely price shares of a company with an uncertain outlook too low. It’s only when the market is certain about a company’s performance that shares will be priced for perfection. Many companies have seen uncertainties flare up, often from some kind of legal or regulatory issue that can weigh on the stock. The time to buy is when that uncertainty ends. For instance, the FAA recently gave a record fine toSouthwest Airlines (LUV) for travel disruptions the airline experi...

While the holiday season is over, the final data will take weeks to compile. Early information coming in indicates that consumers remained strong, and spending held up well. That’s good news for a number of companies, such as retailers. They have been laggards this year amid fears of a massive slowdown in consumer spending. Companies that supply retailers have also been underperforming, and may get a final boost in the months ahead as the final holiday sales data comes in. One potential winner isMattel (MAT). The toymaker has only returned half as much as the S&P 500 this year. H...

Stocks have had a strong year in 2023. But the past few weeks has seen stocks start to rotate. The big-cap tech stocks that dominated returns for most of the year are slowing down. Other sectors are starting to lead. That suggests that investors may fare well investing with companies that have been underperforming lately. They could see above-average returns, and help keep markets trending higher. One underperforming stock this year has beenBerkshire Hathaway (BRK-B). The conglomerate is up 16 percent compared to a 23 percent return for the S&P 500. Plus, the company has lagge...

As the stock market got mauled by the bear in 2022, one sector held its own: Energy. The trend has reversed in 2023, as the sector has been whipsawed by fluctuating oil prices. But there’s another twist to this trend. And understanding it will help investors navigate moves into 2024. While energy prices have been declining even as OPEC nations have cut their production, this new trend hints at the profits available now. That trend is the rise of U.S. oil production. It’s helping offset the fluctuations occurring from OPEC, as well as the potential dangers posed by a cutoff from natio...

2023 has been a great year for big-cap tech companies, particularly those investing heavily in artificial intelligence (AI). That’s especially true for hardware companies that can provide the tools necessary to run today’s latest AI programs. Most of these massive companies are priced for perfection, however. Smaller companies, which haven’t had the investor interest yet, could be better players in the AI space, as they catch up to the big names that moved first on the AI news. For instance, memory chip manufacturerMicron (MU) is soaring, following better-than-expected quarterly resu...