The stock markets have entered 2020 on much more stable footing than it entered 2019. From current perspective, investors shouldn’t neglect the potential risks at the beginning of the year 2021. Trade tensions, a slump in consumer power, slowing economic growth potentially derail economic growth.
2020 was a big year for the stock markets. We give you a brief list of trends on the stock markets to watch closely to see what to expect during the current and the next year.
Table of Contents
The factors that affect stocks
There are a couple of factors that do affect the stock market. The US election is the major catalyst for the stock prices at this moment. Some economic experts are prone to express a positive opinion regarding Trump reelection, which will produce little market reactions.
Tech war between US and China and its consequences
The tension that has already taken place will most probably continue to rise after the presidential elections. According to the officials from the bank of America, the next stage of the trade war will be the tech war. Automation improvements and increasing costs in China impact global supply chains.
The Best Stocks to To Invest In
After the whole year of chaotic stock market volatility due to the coronavirus pandemic – including the official end of the 11-year-old bull market – investors are looking for the right opportunities to invest in the stock market and make a decent profit from falling stock prices.
Let’s see what the best stocks to invest in the year to come are.
1. Invest in Roku Stock
It’s safe to say that Roku’s valuation has stretched a bit over the past year, with stocks surpassing $ 175 last fall and reaching 20x sales in the same time frame.
It is important to note that incredible fundamentals drove investor enthusiasm; Roku’s core operating parameters were all heading in a good direction.
In addition, the company has just closed its first year at $ 1 billion, active accounts hit 36.9 million, and Roku is improving the monetization of higher commitments.
Until today, the user growth of Roku comes mainly from the US, Canada, UK, Mexico, and Brazil. It operates in 20 countries in total.
Roku helps other streaming services in myriad ways, serving ads to attract subscribers, and reducing subscription sales through revenue-sharing deals.
In addition to premium channels, the company’s Roku channel contributes to the growth in advertising revenue. Unlike third-party ad-backed channels, where Roku only gets a 30% reduction in its ad stock, it keeps 100% of those ad sales.
The COVID-19 outbreak could even bolster the company’s commitment, as an increasing number of people stay at home due to travel restrictions and other precautionary measures.
2. Invest in Align Technology Shares
Align Technology, a leading company in the dental industry, shows what the year 2021 could bring us. According to many analysts and stock market experts, the company is set for a bonanza period. The analyst also predicts that the Align tech shares’ profit per share will triple in 2021, reaching $2.9 billion, 40 percent higher than the initial profit projections. If the experts are right, the company’s revenue will rise by 21% compared to 2019, before the burst of a pandemic.
3. Investing in Apple Stocks
Apple was one of the first tech giants to officially warn that the crisis would cause it to miss its first-quarter revenue forecast as the epidemic disrupted iPhone production while hurting demand for Apple products in China.
The Mac maker released its fourth-quarter results in late January, just as the disease spread outside China.
However, the booming service sector continues to generate high-margin recurring revenues, thanks in particular to 480 million paid subscriptions on the tech giant’s platforms.
According to the IDC market research, the wearable market, led by Apple, saw a strong growth of 82% in the fourth quarter. Apple’s articles business is now the size of a Fortune 150 company.
A lot can change in just a few months due to the unpredictable pandemic situation. The closer the month of November and the election results, the more we expect the stock market to fluctuate. The changes will certainly influence the stock market performance because of the makeup of the American Congress.