🎁 Goldman's got these stocks on its wish list

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Hi Reader, here's what you need to know for December 23rd in 3:15 minutes.

🍾 Finimized while wishing the Federal Reserve a happy birthday at The Pantry in Jekyll Island, Georgia (⛅️ 6°C/42°F)

Today's big stories

US stock exchanges are looking for more business outside of China
Goldman Sachs has picked out a few stocks that could give you good returns in 2022 – Read Now
General Mills became the latest consumer staples giant to announce price rises

Polyamoro-US

What’s Going On Here?

US stock exchanges are feeling pretty unfulfilled by a sudden slowdown in business from China, so they’re looking elsewhere in Asia to get their fix.

What Does This Mean?

Chinese government crackdowns are pushing more of the country’s firms to cancel plans to list their stocks on US exchanges, since the prospect of regulators getting involved isn’t exactly something to look forward to. Bad news for US stock exchanges: a lack of new Chinese listings means their revenues are at risk, so they’re looking for companies from other Asian countries to pick up the slack. But that’s hardly the norm: more Chinese companies listed in the US this year alone than Asian-Pacific companies have over the past decade. Still, that hasn’t put the exchanges off: they reckon that, thanks to large populations and growth potential, companies in countries like India and Indonesia could be big opportunities for new listings going forward.

Why Should I Care?

For markets: Once bitten, twice shy.
Chinese companies might have dodged a bullet: data from Bloomberg on Wednesday showed more than half of this year’s initial public offerings in the US are now trading below their initial prices (tweet this). In fact, on average, stocks of companies that went public in 2021 are up less than 2% – way less than the 26% rise of the country’s stock market. That’s got some analysts predicting that investors, wary about getting burnt twice, might be extra cautious about investing in any new listings going forward.

The bigger picture: Investors love China.
If there’s one thing investors don’t seem cautious about, it’s investing in China: data out this week showed that an index tracking Chinese internet companies received more than twice as much net investment as any other US thematic index since mid-February. That might have something to do with China’s “common prosperity” drive: it’s wiped over $1 trillion from the market value of Chinese stocks since February, so investors can snap them up more cheaply.

You might also like: Goldman thinks these 50 stocks will profit from China’s “common prosperity” push.

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Analyst Take

Goldman’s Top Stock Picks For A Calmer 2022

Andrew, Analyst

What’s Going On Here?

There’s one thing 2021 did well: get stock market investors some great returns.

And while we’re all crossing our fingers that 2022 brings us better health and takes us a step closer to normality, it wouldn’t hurt to keep our returns high too.

Issue is, analysts just can’t agree on what the next year has in store for stocks – their estimates range from the S&P 500 gaining 15% to declining by 5%.

But good old Goldman Sachs has screened the US market and found a strategy that could help you maximise your returns with minimal price swings.

It involves something called the “High Sharpe Ratio Basket”, and Goldman reckons it contains the stocks with the highest prospective risk-adjusted returns.

So that’s today’s Insight: the criteria Goldman uses to find a compelling list of stocks, and how you can do the same.

Read or listen to the Insight here

Shares are for sharing

If you don’t have all your gifts sorted yet, we might just have the perfect thing…

With Lightyear, you can send your friends shares in their favorite companies. And right now, you’ll get $10 worth of credit to pick shares for five people. That’s $50 of free credit.

All you need to do is download the Lightyear app, send your friend an invite, and choose a stock to give them. It’s a super easy last-minute present – and potentially a profitable one too.

And once you pop open Lightyear’s app, you won’t be able to stop: you’re able to invest in global markets across multiple currencies without hidden fees, after all.

Round off your holiday shopping right: get your $50 of free credit today.

Get Your Free $50

Remember, when investing your capital is at risk. For the T&Cs, please visit Lightyear’s website.