AI Models Continue to Favor Energy Sector

This is a week of record highs!  Nasdaq closed at an all-time high on Thursday and so did the S&P 500. Sentiment has been mostly positive – the COVID-19 vaccine from Pfizer and BioNTech is being distributed and the FDA is set to review the Moderna vaccine for emergency authorization after its advisory group made a formal recommendation on Thursday. However, as the economy and labor market continues to struggle, it’s difficult to say whether things could take a sharp turn for the remainder of the year.

Next week, our AI has selected several Top Buys from a variety of industries. Hemisphere Media Group Inc (HMTV) has been assigned Q-Factor Scores of C in Growth, C in Low Volatility Momentum and A in Quality Value while Metlife Inc (MET) has been assigned scores of A in Technicals, C in Growth, C in Low Volatility Momentum and A in Quality Value. 

Lockheed Martin Corp (LMT), a familiar name on our list of top stocks to buy, received scores of C in Technicals, B in Growth, A in Low Volatility Momentum and C in Quality Value. Lockheed Martin has been a notable Top Buy and was highlighted in both July and October newsletters. The company announced last month that it has received $2.4 billion in contracts, notably to build the C-310 transport aircraft.

Wayfair Inc (W) has been rated Top Short by our AI for the next week and month and has received Q-Factor Scores of F in Technicals, D in Growth, F in Low Volatility Momentum and C in Quality Value. The other Top Short for the next month is Dave & Buster's Entmt Inc (PLAY), which has received scores of D in Technicals, F in Growth, D in Low Volatility Momentum and D in Quality Value. A notable Top Buy for the next month is General Motors Co (GM), which has received scores of B in Technicals, B in Growth, B in Low Volatility Momentum and C in Quality Value.

Looking at ETFs, there are several notable picks for both Top Buys and Top Shorts. Gold, a frequent Top Buy, is actually rated Top Short this time around. iShares Gold Trust (IAU) is rated Top Short for the next week and month while SPDR Gold Trust (GLD) is a Top Short for the next month. In the past year, gold has notoriously outperformed the broader market and was frequently regarded as a safe commodity to invest in.

Similar to the last few weeks, we’re still seeing the energy sector topping the list of ETFs rated Top Buy. Next month, both Energy Select Sector SPDR Fund (XLE) and SPDR S&P Oil & Gas Exploration & Production (XOP) are rated Top Buy. Next week, iShares Global Utilities (JXI) is rated Top Buy. We’re seeing less of the banking sector, although SPDR S&P Regional Banking (KRE) continues to be rated Top Buy for the next week.

Our favorite options trade this week: 

Short Put Spread in iShares China Large-Cap ETF (FXI) – offers long exposure to large-cap Chinese stocks.  It is a great way to introduce upside exposure to Asian and Emerging stocks in a portfolio for a minimum investment.

The Latest

Our AI has crunched the numbers and identified and rated the top Dividend ETFs and the top Dividend Stocks for December.

For investors looking to up their game in value investing, which have significantly outperformed growth stocks, these are the top Value ETF picks for December.

Update: The beta version of the Forbes AI Investor investment discovery platform is now live! It’s a simple, easy to use, jargon free platform that helps users discover new investments using AI. Our goal is for investors to kickstart their research with Forbes AI Investor so that they spend less time finding ideas and more time on optimizing their decisions. The platform takes guesswork out of investing and provides AI driven high conviction stocks and ETFs ideas. We opened up the platform to the first 100 users. Investors who are part of our investing slack channel will get priority access.

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Due to the holiday schedule, we will not be sending the newsletter in the last two weeks of December. We will resume in the new year.