This week ahead || Oct 7th - Oct 11th 2024
Here's your news for the week ahead.
Oil stocks have more room to run as tension in the Middle East escalates
Crude oil prices surged 9% last week, driven by escalating Middle East tensions, with Israel’s vow to retaliate against Iran pushing traders to bet on $100 oil. Experts, including Rystad Energy’s Claudio Galimberti, warn of a possible supply disruption, especially as Iran, a key oil producer, faces heightened conflict risk. This could significantly boost prices, with Exxon, Chevron, and Shell seen as potential beneficiaries. Wall Street is also monitoring the potential closure of the Strait of Hormuz, a key oil trade route, which could further drive up prices and impact global inflation and economic growth.
Seana Smith
Google’s Grip on Search Slips as TikTok and AI Startup Mount Challenge
Google's dominance in the $300 billion search advertising market is being challenged as rivals like TikTok and AI startups introduce new offerings. TikTok's ad product, which targets search queries, directly competes with Google, while AI-driven platforms like Perplexity also aim to disrupt the market. Google’s share of the U.S. search ad market is expected to drop below 50% next year as Amazon gains ground. Meanwhile, advertisers are exploring alternatives, as AI and social video reshape search behavior. Legal challenges further compound Google's vulnerabilities as it faces increased competition.
Suzanne Vranica and Miles Kruppa
MedTech stock: Q3 earnings preview
The third quarter earnings season for MedTech stocks follows a challenging second quarter, with investors remaining cautious despite some recovery. Analysts at Citi Research highlight concerns over macroeconomic headwinds, Federal Reserve rate decisions, and company-specific developments, particularly regarding product pipelines and regulatory outcomes. While the MedTech sector has narrowed its gap with the broader market, it still lags behind. Becton Dickinson is seen favorably due to an acquisition, while Edwards Lifesciences faces uncertainty after selling its Critical Care unit. Tandem Diabetes is under pressure to meet earnings expectations. Citi analysts emphasize the importance of future guidance, especially for 2025, and anticipate continued divergence between large-cap and small/mid-cap MedTech companies.
Navamya Acharya
BCA says investors should fade the real estate rally
BCA Research advises caution regarding the recent rally in the real estate sector, despite its strong performance within the S&P 500. The firm warns that the momentum may not be sustainable, as real estate could struggle if economic growth slows, even with falling interest rates. BCA highlights challenges such as decelerating net operating income, rising delinquencies, and distress in certain subsectors. They recommend underweighting Industrial, Residential, and Office REITs due to headwinds like overbuilding and elevated vacancy rates, while favoring Specialized REITs tied to the digital economy.
Sam Boughedda