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Nasdaq falls for a fourth straight day as Wall Street frets over potential of higher interest rates
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Stocks & ETFs to watch for end of Qtr + 5 stocks that were upgraded including Volkswagen and Micron

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Jessica Amir joined discussion · Sep 25, 2023 01:11
Stocks & ETFs to watch for end of Qtr + 5 stocks that were upgraded including Volkswagen and Micron
What to watch and consider now
- This September, global markets have seen their biggest monthly pullback since December 2022, with the US benchmark index, the S&P500 down 4.2%, the Nasdaq 100 shed 5.2%, and Australia's benchmark index, the ASX200 is 3.6% lower (month to date). Stocks such as global chip maker giant, Nvidia are down 16%, Australia' s second biggest lithium company Allkem is down 17%, while global payment business Block trades down 22% month to date.
It begs the question, who is leaning into the Warren Buffett adage; ‘be fearful when others are greedy and greedy when others are fearful'? Or are investors singing the song‘Wake Me Up When September Ends' on full blast?
- Remember that with end of quarter, investment managers are exercising end-of-quarter rebalancing. This is where money managers typically buy into stock market underperformers, and take profits/sell those stock market darlings. They do this to bring their investment portfolios back into alignment, to ensure the fund meets its mandate. WATCH our 60-second video to find out who this quarter's best and worst performers are in the US andAustralia, that could be subject to rebalancing.

Did you know quality companies and ETFs are all the rage this month?
This month, we have seen ETF flows surge into ‘quality’, which reflects that investors are regaining an appetite for companies with high repeatable cashflows, given such companies have historically outperformed the market in recessionary and slowing economic cycles.
Institutional ETF flows have started to go into the $Ishares Russell 1000 Value Etf(IWD.US)$ this month; with many believing the ETF will turn a corner, after it's been subject to YTD and YoY outflows. The ETF is down 5.4% from its July high. The IWD ETFs gives investors exposure to US companies that are thought to be undervalued by the market, relative to comparable companies. The IWD's biggest holdings include Berkshire Hathaway $Berkshire Hathaway-A(BRK.A.US)$, Exxon Mobil Corp $Exxon Mobil(XOM.US)$, JPMorgan Chase & Co $Jpmorgan Chase & Co(JPM-C.US)$, Johnson & Johnson $Johnson & Johnson(JNJ.US)$, Chevron Corp $Chevron(CVX.US)$, Procter & Gamble $Procter & Gamble(PG.US)$ and Merck & Co $Merck & Co(MRK.US)$. The IWD ETF appears to be nearing oversold territory, and chartists might recognize the ETF appears due for a rally, so it's worth watching IWD.
Institutional ETF flows have also multiplied this month in the $iShares MSCI USA Quality Factor ETF(QUAL.US)$, which tells us investors are seeking companies with positive fundamentals, (high return on equity, stable year-over-year earnings growth and low financial leverage). QUAL's biggest holdings include Nvidia Corp $NVIDIA(NVDA.US)$ (5.8% Of The Etf), Visa $Visa(V.US)$ (4.64%), Meta $Meta Platforms(META.US)$ (4.4%), Apple $Apple(AAPL.US)$ (4.4%), Microsoft $Microsoft(MSFT.US)$ (4.4%), and Mastercard $MasterCard(MA.US)$ (4.4%). The QUAL ETF is down 5.6% from its July high and appears to be nearing oversold territory. If you are a chartist, you'd also see the QUAL ETF looks due for a bounce. So this is an ETF to watch.

Use these recent broker upgrades; as potential trading and investing opportunities
ASX companies....
Overwhelmingly, ASX-listed stocks that have seen the most upgrades of late have been those deemed quality businesses, with high repeatable cashflows and can act as stalwarts in a slowing economic environment (while interest rates continue to rise). As such we have seen;
1- Pallet business Brambles $Brambles Ltd(BXB.AU)$ be upgraded by Macquarie to outperform.
2- Australia's biggest electricity and gas seller, AGL $AGL Energy Ltd(AGL.AU)$ upgraded by Macquarie to outperform.
3- Global toll road giant Transurban $Transurban Group(TCL.AU)$ raised to a buy by Jefferies.
Global companies...
We'vve see global companies in future-facing industries, that are involved in changing the world as we know it, see the most broker upgrades of late. They include
1- Microchip business, Micron Technology $Micron Technology(MU.US)$ was upgraded as a BUY by Deutsche Bank (DB) $Deutsche Bank(DB.US)$ as Micron is benefiting from increasing demand for AI servers. Micron's product price increases should accelerate the business's revenue and earnings per share (EPS) above street estimates for the next few quarters according to Deutsche Bank. DB not only upgraded Micron as a buy but also raised its price target from $65 to $85, citing a ~20% potential upside from current levels.
2- Car maker and EV giant, Volkswagen $VOLKSWAGEN AG(VLKAF.US)$, was upgraded by Stifel $Stifel Financial(SF.US)$ to a buy amid the green energy push. Stifel upgraded Volkswagen saying it's seeing 'record negative sentiment' but the business is in a 'critical phase' and sees upside due to cost-cutting. Volkswagen has 18 buys, 5 holds and 2 sells according to Bloomberg.

Invest in your financial future today.
Happy Investing
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The information is general in nature and has been prepared without considering your financial objectives, situation or needs.

Consider the appropriateness of this information in light of your personal circumstances before making investment decisions.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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