Dow Jones Futures Dive As Stock Market Faces Coronavirus Pandemic Fears; Apple Undercuts Key Support

Dow Jones futures dived on fears of a global coronavirus pandemic. Apple stock may offer a new buy point, or sell signal. Watch TransDigm, Tandem Diabetes, Palo Alto, Intuit, Keysight.

How Strategists and Investors See Coronavirus Playing Out

(Bloomberg) -- A raft of new coronavirus cases in numerous countries outside China over the weekend has ignited fresh concern about the ability of the illness to spread and its potential economic impact.European shares plunged 3.7% as of 11:12 a.m. in London after Italy’s government imposed a lockdown on an area of 50,000 people near Milan and took other measures as infections there exceeded 130. South Korea’s Kospi tumbled 3.9% after the number of cases in the country surged and the government raised its infectious-disease alert to the highest level. Iran reported an eighth death.That’s all on top of the impact in China, where millions of firms face potential collapse if banks don’t act. After meeting on Friday, the nation’s leaders said they will exercise more flexibility in monetary and fiscal policy.Read more: New Cases in Gulf, Italy Boost Fears of PandemicHere’s what market players are saying about the latest developments:Hello TINA“The key risk you’re facing is that this coronavirus now via a lot of these unwanted disruptions will actually lead to negative earnings growth and that will potentially scare investors considering where valuations are,” Christian Mueller-Glissman, managing director of asset allocation at Goldman Sachs Group Inc., said in an interview with Bloomberg TV. “Lower yields obviously make you want to own even more risky assets -- like we always call it TINA, there is no alternative -- so you have people being forced to own something in equities. Secular growth stocks are trading at one of the highest valuation premia in history. The problem is some of those are also exposed to these supply-chain disruptions, think about the big FAANG names. As a result of that we think that this in the near-term will potentially create volatility in them as well. So there’s nothing really completely safe.”A Shallow V“It is difficult to evaluate the impact thus far. High frequency data show very little to no pick-up in activity so far. There may be a risk that a V-shaped recovery of Chinese growth turns out to be shallower than many currently assume,” HSBC Bank Plc strategists led by Max Kettner wrote in a note. “Stick to underweight in equities but close underweight in HY; remain overweight in IG credit and government bonds. Equities seem to have escaped ‘the bad news is bad’ paradigm. Other cyclical assets such as FX or commodities have priced growth risks more appropriately. Equities have also outperformed quite substantially vs HY lately and the global ERP has shrunk. We therefore prefer adding to HY than to equities. We remain cautious on EM asset classes and overweight gold and government bonds.”Normal by July“More near-term panic will weigh on risk, but panic is necessary to increase containment odds. Credit markets appear to recognize that,” said Dennis DeBusschere of Evercore ISI. “EISI’s Survey team asked investors about the impact of the outbreak and the vast majority of respondents see both the risks as understated and expect U.S. Treasury yields were likely to decline by 25 basis points (to about 1.3%). 80% of investors expect supply chains to return to near-normal by July though.” (The survey was published on Feb. 17.)Hard to Pick Bottom“With cases of COVID-19 still rising, it is hard to tell when manufacturing will bottom, potentially setting the stage for prolonged weakness,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “This means that we’re going to see the juxtaposition of more safe-haven demand.” Gold Rally“U.S. real rates have plummeted during the virus scare, with 10y TIPS yields -- already quite low at just 6.5 basis points above zero on January 17 -- are today more than 15 basis points below zero,” and John Velis, FX and macro strategist at BNY Mellon. “Since gold tends to trade inversely to real rates, the rally in gold will probably persist as long as the latter stay under pressure.”‘Intense’ Hunt for Yield“We have been advocating a more balanced position between bonds and equities in recent weeks since we have little clarity on how the outbreak would evolve. It seems like that the number of new cases in China is coming down, with the daily number of recovered patients higher than the new confirmed cases. This may encourage the Chinese authorities to permit more workers to return to work and limit disruption to production,” said Tai Hui, chief market strategist for Asia at JPMorgan Asset Management. “The decline in bond yields also meant investors’ search for yield will remain intense. This underpins our constructive view on EM fixed income and developed market corporate debt.”Risk Aversion“Risk aversion is likely to intensify over the near term given the sharp rise in cases in Korea, Italy and elsewhere,” said Mitul Kotecha, senior emerging markets strategist at TD Securities in Singapore. “Markets are becoming increasingly focused on the risk of more prolonged economic damage than had been previously expected. Supply chains are becoming increasingly exposed, while services and tourism are suffering across many countries.”China Weakness“Policymakers are trying to get the economy going again but we think weakness is likely to persist well into the fourth quarter,” said Win Thin, global head of currency strategy at Brown Brothers Harriman, of China. “Stimulus is in the pipeline but it won’t be enough to totally offset the growing impact of the virus.”Asymmetric Dollar Strength“U.S. dollar strength will likely be asymmetric,” said Citigroup Global Markets Asia-Pacific chief economist Johanna Chua. “Given the low cost of capital globally and comforting commitments from authorities to render further support, high yielding emerging-market FX (Indian rupee, Philippine peso) may not hurt as much and is likely to outperform the low yielding EM FX especially in Asia, where the Singapore dollar, Thai baht, Korean won etc. are also the most impacted on economic activity -- and hurt on their current accounts. In spite of being a high yield FX, the Indonesian rupiah may have some more unwind of stretched long positioning before settling down.”Headline Risk“We view this as headline risk. Our base case view is that coronavirus continues to represent demand delayed and not demand destroyed,” said Steve Chiavarone, a portfolio manager with Federated Investors.(Updates with fresh comments from Goldman Sachs and HSBC.)\--With assistance from Vildana Hajric, Adam Haigh, Lilian Karunungan, Ruth Carson, Francine Lacqua, Cecile Gutscher, April Ma and Amanda Wang.To contact the reporters on this story: Joanna Ossinger in Singapore at jossinger@bloomberg.net;Anchalee Worrachate in London at aworrachate@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Sam Potter, Cecile GutscherFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Morgan Stanley is paying $2,500 per customer for E-Trade. You can earn a $3,500 sign-up bonus for signing with a new broker — with one major catch

If the latest Wall Street mega-deal doesn’t make you want to switch online brokerage accounts for a lucrative sign-up bonus, maybe it should. Wall Street giant Morgan Stanley announced an agreement Thursday to pay $13 billion to acquire the online brokerage E-Trade which has 5.2 million customer accounts. “The combination will significantly increase the scale and breadth of Morgan Stanley’s Wealth Management franchise, and positions Morgan Stanley to be an industry leader in Wealth Management across all channels and wealth segments,” Morgan Stanley said in a statement.

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  Morgan Stanley acquiring E*Trade for $13B in bet on 'Main Street customers'

  ABC News
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  Morgan Stanley's Gorman charts ambitious course with $13 billion E*Trade deal

  Reuters

Here are Warren Buffett's top 15 stock holdings

These are not stock market wagers, Buffett says.

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  Warren Buffett says Berkshire is '100% prepared' for his death, details what will happen to his stock

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  Warren Buffett shares an unfortunate story that reflects Berkshire Hathaway's incredible scope

  Yahoo Finance

Here's what smart investors do with their 401(k)s when the stock market is hitting highs

Rarely do investors consider defensive moves in their 401(k)s when stocks are  rallying, but that's exactly when you should start thinking about them.

Millions of Chinese Firms Face Collapse If Banks Don’t Act

(Bloomberg) -- Brigita, a director at one of China’s largest car dealers, is running out of options. Her firm’s 100 outlets have been closed for about a month because of the coronavirus, cash reserves are dwindling and banks are reluctant to extend deadlines on billions of yuan in debt coming due over the next few months. There are also other creditors to think about.“If we can’t pay back the bonds, it will be very, very bad,” said Brigita, whose company has 10,000 employees and sells mid- to high-end car brands such as BMWs. She asked that only her first name be used and that her firm not be identified because she isn’t authorized to speak to the press.With much of China’s economy still idled as authorities try to contain an epidemic that has infected more than 75,000 people, millions of companies across the country are in a race against the clock to stay afloat.A survey of small- and medium-sized Chinese companies conducted this month showed that a third of respondents only had enough cash to cover fixed expenses for a month, with another third running out within two months. Only 30% of such firms have managed to resume operations due to a complicated local government approval procedure as well as a lack of employees and financing, a government official said at a press conference on Monday.While China’s government has cut interest rates, ordered banks to boost lending and loosened criteria for companies to restart operations, many of the nation’s private businesses say they’ve been unable to access the funding they need to meet upcoming deadlines for debt and salary payments. Without more financial support or a sudden rebound in China’s economy, some may have to shut for good.“If China fails to contain the virus in the first quarter, I expect a vast number of small businesses would go under,” said Lv Changshun, an analyst at Beijing Zhonghe Yingtai Management Consultant Co.Despite accounting for 60% of the economy and 80% of jobs in China, private businesses have long struggled to tap funding to help them expand during booms and survive crises. About two-thirds of the country’s 80 million small businesses, including many mom-and-pop shops, lacked access to loans as of 2018, according to China’s National Institution for Finance & Development.President Xi Jinping over the weekend pledged a greater focus on reviving the economy, with a more proactive fiscal policy, accelerated construction projects and freer reserves for commercial lenders to unleash more funding.Support from China’s banking giants in response to the outbreak has so far been piecemeal, mostly earmarked for directly combating the virus. Industrial & Commercial Bank of China Ltd., the nation’s largest lender, has offered relief to about 5% of its small business clients.In an emailed response to questions from Bloomberg News, ICBC said it has allocated 5.4 billion yuan ($770 million) to help companies fight the virus. “We approve qualified small businesses’ loan applications as soon as they arrive,” the bank said.As a group, Chinese banks had offered about 794 billion yuan in loans related to the containment effort as of Feb. 20, according to the banking industry association, with foreign lenders such as Citigroup Inc. also lowering rates. To put that into perspective, China’s small businesses typically face interest payments on about 36.9 trillion yuan of loans every quarter.Stringent requirements and shortlists restrict who can access special loans earmarked by the central bank for virus-related businesses, while local governments and banks have imposed caps on the amounts, according to people familiar with the matter. A debt banker at one of China’s largest brokerages said his firm opened a fast lane to ease debt sales by businesses involved in the containment effort, with borrowers required to prove they will use at least 10% of the proceeds to fight the disease.That’s of little help to a car dealership. Brigita, whose firm owes money to dozens of banks, said she has so far only reached an agreement with a handful to extend payment deadlines by two months. For now, the company is still paying salaries.Many of China’s businesses were already grasping for lifelines before the virus hit, pummeled by a trade war and lending crackdown that sent economic growth to a three-decade low last year.At most risk are the labor-intensive catering and restaurant industries, travel agencies, airlines, hotels and shopping malls, according to Lianhe Rating.Yang, a property manager of a seven-story mall in Shanghai, says a tenant who runs a 150-room hotel that’s usually busy has called asking for a month’s rent waiver after business dried up. She expects the massage parlor that rents space in the mall is also struggling and is open to extending some help.A deputy financing director at a small developer in central Anhui province said his firm is even being denied loans under existing credit lines. A drop in sales has hurt the company’s credit profile and a dearth of new projects means there’s no collateral to put up. Without access to credit, the business can survive for about four months, or maybe longer if some payments can be delayed, he said.Banks are hardly any better off themselves. Many are under-capitalized and on the ropes after two years of record debt defaults. Rating firm S&P Global has estimated that a prolonged emergency could cause the banking system’s bad loan ratio to more than triple to about 6.3%, amounting to an increase of 5.6 trillion yuan.Wu Hai, owner of Mei KTV, a chain of 100 Karaoke bars across China, took to the nation’s premier outlet of discontent, social media platform WeChat, to voice his despair.KTV’s bars have been closed by the government because of the virus, choking off its cash flow. The special loans from the authorities will be of little help and no bank will provide a loan without enough collateral and cash flow, he said on his official WeChat account earlier this month.Wu couldn’t be reached for a direct comment, but on WeChat he gave himself two months before he has to shutter his business.(Adds comment from official in 4th paragraph, updates lending data in 7th.)\--With assistance from Jun Luo, Emma Dong and Yinan Zhao.To contact Bloomberg News staff for this story: Evelyn Yu in Shanghai at yyu263@bloomberg.net;Ken Wang in Beijing at ywang1690@bloomberg.net;Zheng Li in Shanghai at zli698@bloomberg.net;Xize Kang in Beijing at xkang7@bloomberg.netTo contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Jonas Bergman, Michael PattersonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

The ugly side to the booming U.S. economy, in one telling chart

Low unemployment, a relentless bull market, polls showing people feel pretty good about their finances — by many measures, the good times are rolling. Just ask President Trump, who calls it “the greatest economy in our nation’s history.”

Stocks Plunge, Havens Jump on Mounting Virus Fears: Markets Wrap

(Bloomberg) -- U.S. equity futures tumbled alongside stocks in Europe and Asia on Monday as authorities struggled to keep the coronavirus from spreading more widely outside China. Havens including Treasuries and gold jumped.In a dramatic day across markets, these were some of the standout moves:Contracts on the three main U.S. stock benchmarks were all down more than 2%, with those on the S&P 500 Index pointing to the biggest drop since August. The Dow Jones Industrial Average may erase its gains for the year.The Stoxx Europe 600 Index slid as much as 3.6% on twice its average volume, heading for the largest drop since 2016, as investors fled travel and luxury-goods shares. A gauge of credit risk on the region’s high-yield companies jumped.The yield on 10-year Treasuries sank to its lowest since 2016.South Korea’s benchmark dropped 3.9%, leading declines across Asia, though Japan’s markets were shut for a holiday.Spot gold approached $1,700, while Brent crude oil tumbled almost 4%.The risk-off mood was triggered by multiple outbreaks of the epidemic that’s now spread to more than 30 countries, with South Korea reporting a jump in infections and Italy locking down an area of 50,000 people near Milan. Finance chiefs and central bankers from the largest economies warned this weekend that they saw the virus bringing downside risks to global growth.Governments and companies are curbing travel and trade in an attempt to contain a novel pathogen that can be transmitted by people without symptoms. Today’s market moves follow on last week’s surge into havens after fresh warnings by companies over the potential impact of the virus on business and global supply chains. Adding to the anxiety Monday was China announcing an easing of the quarantine of Wuhan, only to retract the statement hours later.“Until last week it was largely contained in terms of growth of new cases and growth in fatalities to China,” Tim Graf, head of macro strategy at State Street, said in a Bloomberg TV interview. “And there was also a belief that whatever policy response might come, it would be forceful enough that you would see a V- or U-shaped recovery. But perhaps today we’re starting to see that might be a little more complicated.”Elsewhere, Italian bonds dropped on concern that the spread of the coronavirus may push the economy into a recession. The Australian dollar chalked up a fresh 11-year low and the offshore yuan held most of last week’s decline.These are some key events coming up:Earnings keep rolling in from companies including: Home Depot Inc. on Tuesday; Peugeot SA on Wednesday; Baidu Inc., Best Buy Co. Inc., Occidental Petroleum Corp. and Dell Technologies Inc. on Thursday; and London Stock Exchange Group Plc on Friday.The Democratic presidential debate in South Carolina is on Tuesday.The Bank of Korea announces its policy decision on Thursday, with risks to the outlook growing amid a surge in coronavirus cases.U.S. jobless claims, GDP and durable goods data are out Thursday.Japan industrial production, jobs, and retail sales figures are due on Friday.These are the main moves in markets:StocksFutures on the S&P 500 Index sank 2.3% as of 12:05 p.m. London time.Nasdaq 100 Index futures fell 2.5%.The Stoxx Europe 600 Index slid 3.3%.South Korea’s Kospi index tumbled 3.9%.The MSCI Asia Pacific Index dipped 1.3%.CurrenciesThe Bloomberg Dollar Spot Index increased 0.4% to 1,218.64.The euro decreased 0.2% to $1.082.The British pound declined 0.5% to $1.2901.The Japanese yen strengthened 0.2% to 111.37 per dollar.BondsThe yield on 10-year Treasuries declined seven basis points to 1.40%.The yield on two-year Treasuries declined seven basis points to 1.28%.Germany’s 10-year yield sank six basis points to -0.49%.Britain’s 10-year yield decreased four basis points to 0.528%.CommoditiesWest Texas Intermediate crude sank 3.7% to $51.38 a barrel.Gold advanced 2.2% to $1,680.12 an ounce.Silver climbed 1.5% to $18.77 per ounce.\--With assistance from Matt Turner, Andreea Papuc and Adam Haigh.To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.netTo contact the editors responsible for this story: Sam Potter at spotter33@bloomberg.net, Yakob PeterseilFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Dow futures drop nearly 700 points as coronavirus spread stirs fears of global economic impact

U.S. stock-index futures drop sharply, joining a global equity selloff, as the spread of coronavirus raised worries that global economic growth could take a hit.

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  Xi says China facing 'big test' with virus, global impact spreads

  AFP
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  Shares drop, gold surges as investors scurry for safety

  Reuters

Warren Buffett says Berkshire is '100% prepared' for his death, details what will happen to his stock

He says there's no reason for shareholders to worry.

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  Why Warren Buffett wants you to ignore Berkshire's $53.7 billion gain on stocks

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  What to expect from Warren Buffett's annual shareholder letter

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Coronavirus fears shouldn't stop you from investing in stocks and adding to your 401(k)

Worried about how the coronavirus could affect your stock market returns? Here's how the virus could shape your 401(k) in 2020.

Dow futures plunge 800 points as coronavirus cases outside China jump

U.S. stock futures tumbled Monday after a sharp rise in coronavirus cases outside China revived concerns about an economic fallout from the outbreak.

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  Concerns grow over rising global spread of coronavirus

  Reuters Videos
• Fears Grow of Coronavirus Spread as Cases Spike Beyond China

  Bloomberg

Is Tesla Really The Emerging ‘Energy King’?

Tesla’s share price has almost tripled this year, and while electric cars remain the company’s most important product, it could actually become a real energy giant

Tesla Rival Sets Out to Banish 160-Year-Old Lead Tech From Cars

(Bloomberg) -- Your sleek new Tesla Model S or electronic BMW has a distinctly 19th century feature that you may not be aware of, among its batteries. A company in Estonia wants to change that.Skeleton Technologies Group OU is working on supercapacitors, light-weight and long-life components that can distribute intensive bursts of power. These may help eliminate lead-acid batteries, a piece of technology invented in 1859 that still lurks under the hoods of Teslas in addition to the main lithium-ion power source.Supercapacitors have some way to go before they are widely adopted. There is still a gap with the popular lithium-ion units on how much energy they can store, Skeleton Chief Executive Officer Taavi Madiberk admits. Even so, the technology is promising for offering higher peak power output and reliability in extreme temperatures and Skeleton has already sold it to clients across the transport industry.“Sometimes people think that lead is a problem of the past because it relates to internal combustion engines but in practice all electric vehicles have 12-volt lead acid batteries,” Madiberk said. “We are working on a viable alternative to replace all lead acid batteries.“Musk’s PhDTesla Inc. Chief Executive Officer Elon Musk actually moved to Silicon Valley in the first place to do research on supercapacitors in his PhD studies at Stanford University, he wrote in a blog post in 2006. While Musk eventually dropped out from Stanford to start his new ventures, he hasn’t abandoned his bet on supercapacitors, also referred to as ultracapacitors.Tesla, also searching for a breakthrough for electric car batteries, bought Skeleton’s competitor Maxwell Technologies Inc. last year. Musk’s company, like other manufacturers, still uses the relatively cheap and recyclable lead-acid battery in addition to the lithium-ion unit.The sector is at a stage where the lithium-ion battery industry was around 1999, according to Madiberk, whose company also has a base in Germany. Back then, lithium-ion batteries cost over $5,000 per kilowatt hour, compared with under $200 now. Supercapacitors may similarly go from $5,000 to as low as $300, he said, without giving an exact timeline.The technology may be useful for some tasks such as regenerating energy from braking, perhaps in conjunction with a lithium-ion unit, said James Frith, an analyst at BloombergNEF who focuses on energy storage. However, it’s only one of a number of available routes for the industry.“There’s been a lot of interest in supercapacitors over the years,” Frith said. “The trouble is that lithium-ion batteries have been coming down in price quite rapidly.”To replace lead-acid batteries, Skeleton is cooperating with some major European carmakers, Madiberk said, without disclosing names. Its products reach an energy density -- a key measure of performance -- of 60 watt-hours per kilogram, exceeding regular lead-acid batteries. Their raw material, a patented graphene composite, provides cost advantages in the long term not just compared with lead-acid but also lithium-ion batteries, he said.Operating Profit“If you look at the supplies of cobalt, lithium, nickel, manganese, then sooner or later with electrification we see significant bottlenecks,” Madiberk said. “The issue with lead is, of course, it’s toxic: the manufacturing process is environmentally harmful.”In heavy transportation, Skeleton has supplied systems that recuperate the braking energy of trams made by Czech manufacturer Skoda Transportation AS and which reduce the fuel consumption of hybrid-electric buses made by the U.K.’s Wrights Group Ltd. Having signed orders totaling more than 150 million euros ($163 million) last year, the company targets revenue of 1 billion euros by 2025 when it sees its serviceable market reaching about 60 billion euros. It expects to reach a profit on the operating level by the end of next year.Aside from Tesla, Madiberk lists U.S.-based AVX Corp. and China State Railway Group as key competitors. The raw materials Skeleton uses have given it a competitive advantage over the bigger rivals, he said.The company’s products had the highest power and maximum peak current from five supercapacitor makers, including Maxwell and Ioxus Inc., in last year’s study by the U.S. Office of Naval Research.Supercapacitors may find their niches if the cost becomes competitive, said Frith, the analyst at BloombergNEF.“The heavy transportation applications probably is the best use case for supercapacitors,” Frith said. “There definitely is a lot of areas within the automotive market where they could find applications.”To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.netTo contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Andras GergelyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

‘Overprotected’ investors could get stung in the next recession, warns top Barclays strategist

You’ve heard of helicopter parents? Welcome to the world of helicopter investing and our call of the day from Barclays Wealth Management’s chief investment officer William Hobbs, who says investors are too angst-ridden lately about one particular monster under the bed.

I’m 40, will get a pension and have $60,000 saved for retirement. Should I borrow from it to pay off $17,500 in credit card debt?

Is it a good idea to borrow from your 457(b) plan to pay off credit card debt? You’re not alone in your struggle with credit card debt: More than half (55%) of U.S. adults who have credit cards say they also have debt, a survey from CNBC and Morning Consult revealed in 2019. Having that credit card debt can take an emotional toll, too: Six in 10 people with credit card debt say they find it stressful, one survey revealed. So should you rush to pay it off with your retirement funds?

• Seven steps to get rid of your credit card debt for good

  Fox Business
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  Some Americans have more credit card debt than emergency savings

  Fox Business

Bearish Bets: 2 Stocks You Should Consider Shorting This Week

Using recent actions and grades from TheStreet's Quant Ratings and layering on technical analysis of the charts of those stocks, Trifecta Stocks identifies five names each week that look bearish. While we will not be weighing in with fundamental analysis we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names. Dillard's Inc. recently was downgraded to Hold with a C+ rating by TheStreet's Quant Ratings.

3 Monster Growth Stocks Primed for Further Gains

When it comes down to it, investors are focused on a single factor: a stock’s ability to deliver returns. As Wall Street observers gauge the strength of a particular investment opportunity, often, they will filter out the noise and instead, concentrate their attention on its long-term growth prospects. We are referring to whether or not a name can achieve sustainable growth over the long haul, handsomely rewarding investors in the years to come.So, with this goal in mind, what’s the first step for investors ready to get down to business? It’s narrowing down the multitude of tickers traded in the public market to a select few that represent the pick of the bunch. To make it into this exclusive group, these names should not only have strong long-term growth narratives, but also the analyst community’s support.Setting out on our own search, we used TipRanks’ Stock Screener tool to pinpoint 3 stocks that have earned “Strong Buy” consensus ratings from the analysts and boast substantial upside potential from current levels.Let’s get started.Selecta Biosciences (SELB)Selecta Biosciences believes that its ImmTOR immune tolerance platform can help patients fight rare diseases. Currently, biologic drugs can trigger neutralizing antibodies (NAbs) that work against the therapy, but ImmTOR technology allows for immune tolerance of the therapy. With this biotech already having gained 107% over the last twelve months, investors want to know if there’s more fuel left in the tank.According to Mizuho Securities analyst Difei Yang, the answer is yes. She highlights the COMPARE trial as being the driving force behind her bullish thesis. The Phase 2 clinical trial is evaluating its lead candidate, SEL-212, in patients with chronic refractory gout, specifically looking at its efficacy in resolving symptoms like flares and gouty arthritis. Based on earlier clinical data, a combined therapy of ImmTOR and pegadricase, the current uricase therapy approved by the FDA, was able to reduce the occurrence of gout flares. As a result, the data allowed SEL-212 to proceed to a head-to-head COMPARE trial, the enrollment of which was completed back in December.Yang argues that the “encouraging” interim data increases the therapy’s likelihood of FDA approval. When looking at the big picture, she is optimistic about the platform as it may lead to a re-dosing of gene therapy. Additionally, she points out that the company was able to cut its financing overhang.Given Yang’s high hopes for SELB, it makes sense that she stayed with the bulls. Not only did she maintain a Buy rating, but she also bumped up the price target from $4 to $7. This new target conveys her confidence in the biotech’s ability to climb 66% higher over the next year. (To watch Yang’s track record, click here)What does the rest of the Street have to say? As it turns out, when it comes to SELB, other analysts are also on board. With 5 Buy ratings assigned in the last three months compared to no Holds or Sells, the word on the Street is that the stock is a Strong Buy. Not to mention the $8.67 average price target puts the potential twelve-month gain at 105%. (See Selecta stock analysis on TipRanks) Ocular Therapeutix (OCUL)This biopharma uses a hydrogel platform to develop innovative treatments for various eye diseases. While its DEXTENZA insert has received FDA approval for the treatment of inflammation and pain following ophthalmic surgery, analysts point to its development pipeline as being capable of driving further growth on top of its already posted 57% one-year rise.On February 7, the company released data from the Phase 1 clinical trial for its OTX-TIC candidate at the Glaucoma 360 conference in San Francisco. The trial is studying the long acting travoprost intracameral implant’s ability to reduce intraocular pressure (IOP) in patients with primary open angle glaucoma or ocular hypertension.The data readout was a major positive for the company, as the candidate was not only able to lower IOP levels very fast, but it also sustained these reduced levels for significant periods of time, 18 months in one case. Adding to the good news, OTX-TIC was found to be well tolerated and safe, with no serious adverse events reported. It should also be noted that OCUL has kicked off the third and fourth cohort enrollment for the Phase 1 trial, and it will continue to monitor the first two cohorts long-term.This trial outcome has certainly impressed Wall Street analysts, namely Yi Chen of H.C. Wainwright. Thanks to the positive data announced so far, the five-star analyst argues that the candidate is more likely to receive approval from the FDA, increasing the pobability from 20% to 30%. To this end, Chen boosted the price target by $2 in addition to reiterating his Buy recommendation. At $8, the new target implies that shares could surge 42% over the next year. (To watch Chen’s track record, click here)Like the H.C. Wainwright analyst, Piper Sandler’s Joseph Catanzaro believes that the data was promising enough to warrant a price target increase. Along with his Overweight rating, the four-star analyst lifted the price target from $5.50 to $7. (To watch Catanzaro’s track record, click here)When looking at other analyst activity, it has been relatively quiet as only one other analyst has published a recent review. That being said, the call was also bullish, making the consensus rating a Strong Buy. Given the $7.33 average price target, a 30% twelve-month gain could be in the cards. (See Ocular Therapeutix stock analysis on TipRanks) Lithia Motors (LAD)Switching gears now, we move on to Lithia Motors, one of the largest car retailers in the U.S. While the name has taken some heat recently, several analysts still see more growth in store for the company, which has already posted a 46% twelve-month gain.In 2019, Lithia became the broadest coast-to-coast car retail network after it expanded its reach to include 92% of the U.S. Currently, the company’s physical network is comprised of 189 stores located across the U.S., with 21 brands of vehicles being represented in California alone.That being said, the auto retailer isn’t finished growing just yet. Last week, Lithia announced that it had acquired two Lexus stores in Sacramento and Roseville, California. According to statements from President and CEO Bryan DeBoer, these two locations could see revenue reach $160 million.Craig-Hallum analyst Ryan Sigdahl doesn’t dispute the fact that the temporary pressure on margins caused him to assume a lower premium to comps. He does remind investors, though, that overall, the company’s most recent quarter was solid. During the quarter, Lithia Motors was able to generate “strong” 7% year-over-year same-store sales growth in a slowing SAAR environment as a result of strength in its used vehicle business. Additionally, the analyst argues that the reason its profits took a hit was its integration of recent acquisitions and its efforts to position itself for a “banner year of growth”.In line with his optimistic approach, Sigdahl tells investors that the recent weakness presents an attractive entry-point. Along with his Buy rating, though, the analyst did reduce the price target from $200 to $170. However, the target still leaves room for a possible twelve-month gain of 31%. (To watch Sigdahl’s track record, click here)Looking at the consensus breakdown, it appears that other Wall Street pros are on the same page. As 100% of the analysts that have issued a recent recommendation see the stock as a Buy, the message is clear: LAD is a Strong Buy. On top of this, the $168 average price target suggests 30% upside potential. (See Lithia Motors stock analysis on TipRanks)

Dominion Reaches Critical Point on Gas Pipeline at Supreme Court

(Bloomberg) -- The fate of Dominion Energy Inc.’s planned $8 billion Atlantic Coast Pipeline will be tested Monday, as the U.S. Supreme Court hears arguments on a crucial permit that would let the natural-gas line cross under the Appalachian Trail.Dominion and President Donald Trump’s administration are asking the high court to jump-start the long-delayed project after a federal appeals court threw out the permit issued by the U.S. Forest Service.The case combines legal issues about federal agency jurisdiction with big stakes for the natural-gas industry and the environment. The court’s ruling, due by June, could have far-reaching implications for pipelines seeking to cross the Appalachian Trail, which stretches from Maine to Georgia.A ruling in Dominion’s favor would eliminate the biggest obstacle to the 600-mile (965 kilometer) pipeline, which would carry as much as 1.5 billion cubic feet of gas per day from the Marcellus shale basin in West Virginia to customers in North Carolina and Virginia.Dominion, which is developing the pipeline with Duke Energy Corp., says it expects to begin construction by mid-year and complete it by the end of 2021. That, however, presumes a victory at the Supreme Court and successful resolution of other issues, including a pending review of the impact on endangered species.“The Supreme Court case is critical for the project, but it’s not a silver bullet for construction across the Appalachian Trail,” said Brandon Barnes, an analyst at Bloomberg Intelligence.The case will also affect EQM Midstream Partners LP’s Mountain Valley gas pipeline from West Virginia to Virginia. Mountain Valley told the Supreme Court in December that the appeals court ruling forced a halt to its project, which is 90% complete at a cost of more than $4.3 billion.The 4th U.S. Circuit Court of Appeals said the Forest Service lacked authority to issue the Atlantic Coast permit because the Appalachian Trail is controlled by the National Park Service. The U.S. Mineral Leasing Act says the Forest Service doesn’t have jurisdiction over “lands in the National Park System.”Dominion and the Trump administration contend that while the National Park Service manages the Appalachian Trail, the underlying land is part of a national forest -- putting it within the Forest Service’s jurisdiction.They say the appeals court ruling would create something Congress never intended: a massive barrier separating consumers on the eastern seaboard from inland energy resources.“The logic of the 4th Circuit’s decision is to create a 2,200-mile barrier to pipeline rights-of-way, with enormous consequences for economic development and settled ways of government administration,” Atlantic Coast argued in court papers.The environmental groups challenging the permit, led by the Cowpasture River Preservation Association, say advocates of the pipeline must get Congress to change the law if they want permission to cross the trail.“This case is not about whether the pipeline is a good idea,” the environmental groups argued. “It is about the statutory protection Congress has afforded to land in the National Park System, including the iconic Appalachian Trail.”Longest TrailThe trail, completed in 1937, is the world’s longest hiking-only footpath, according to the Appalachian Trail Conservancy, which works to protect and maintain it.Atlantic Coast says more than 50 pipelines already cross the trail, some of them on Forest Service land. But the environmental groups say none of those were authorized under similar circumstances. Some are on state or private land, while others predate the 1968 congressional designation of the Appalachian Trail.The case is to some degree a proxy for a broader fight over the nation’s energy policy. Business groups are backing the pipeline, as are unions that would benefit from the thousands of jobs it would create. Local property owners are joining environmental advocates in seeking to block the project.The Appalachian region, which includes the Marcellus shale basin, is practically drowning in natural gas. Pipelines like Atlantic Coast have been proposed as a way to shuttle fuel out of gas fields and toward demand centers in the southeastern U.S., where it can be used for heating and cooking as well as to generate electricity.Opponents question the need for new gas infrastructure, pointing to slowing demand in the years since the project was announced in 2014. Environmental groups say natural gas pipelines further America’s dependence on fossil fuels at a time when climate change demands a complete shift to renewable sources of energy.The Atlantic Coast Pipeline would include a 0.1-mile segment crossing 700 feet below the trail at a spot known as Reed’s Gap about 35 miles west of Charlottesville, Virginia. The exit and entry points wouldn’t be visible from the trail, according to pipeline supporters.The cases are United States Forest Service v. Cowpasture River Preservation Association, 18-1584, and Atlantic Coast Pipeline v. Cowpasture River Preservation Association, 18-1587.\--With assistance from Rachel Adams-Heard and Gerson Freitas Jr..To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.netTo contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo, John HarneyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  Supreme Court wades into battle over Atlantic Coast Pipeline

  Associated Press
• Key Atlantic Coast Pipeline permit heads to Supreme Court

  Associated Press

9 secrets of dividend investing, from a couple of stock pros who beat the market

Many income-focused investors dwell on dividend yield and buy largely on that basis. Not so, say the two dividend-minded mutual-fund managers who run the outperforming Guinness Atkinson Dividend Builder Fund (GAINX) Matthew Page and Ian Mortimer use a much more nuanced approach to get high-achieving results.