Blue waves & green stocks: US election predictions trigger renewables stocks frenzy

Predictions of a Democrat victory in the upcoming US elections have prompted investors to hit renewable energy stocks in force.

Potentially trillions in renewables-focused, government-led spending could be coming the US’ way if Joe Biden and the Democrats take the White House.

This has prompted a “green wave” in investment, mirroring a recent European surge in renewables following the EU’s commitment to sustainable energy.

Joe Biden has promised to set a US goal for net-zero emissions by 2050. This counters President Trump’s plans to take the US out of the Paris Climate Change Accord.

BofA Global Research said last week in its weekly flows report that the surge in solar exchange-traded funds (ETFs) reflected investors’ expectations for a “blue wave” on the Nov. 3 election (blue being the colour most closely associated with the Democratic Party).

Some major surges have occurred on companies pushing ahead with clean power and energy generation projects and products.

For instance, the Invesco solar ETF has climbed 150% year-to-date. This is nearly double the rise of the index that tracks the the FAANG+ basket of technology giants that have led this year’s stock market bounceback.

NextEra exceeded the market value of oil giants Exxon Mobil and Chevron last week. The oil giants have been the most-valuable energy companies for several decades, so this is a major shift.

Danish wind-turbine maker Vestas is up 62% this year, while regional rival Siemens Gamesa is up 59%. A basket of European renewable energy stocks – which also includes these two – is up 68% year-to-date.

Top stocks of 2020

Investments

Here we break down the top performing stocks of 2020.

Top UK stocks: FTSE 350

    Percentage Change 
Name  RIC  YTD 
FTSE 350 Index  .FTLC  -19.8 
Indivior PLC  INDV.L  183.8 
AO World PLC  AO.L  160.2 
Premier Foods PLC  PFD.L  156.8 
Petropavlovsk PLC  POG.L  136.6 
CMC Markets PLC  CMCX.L  136.3 
Avon Rubber PLC  AVON.L  108.1 
Fresnillo PLC  FRES.L  107.9 
Baillie Gifford US Growth Trust PLC  USAB.L  101.4 
Ocado Group PLC  OCDO.L  91.0 
Scottish Mortgage Investment Trust PLC  SMT.L  82.3 
Gamesys Group PLC  GYS.L  79.0 
Games Workshop Group PLC  GAW.L  75.9 
Plus500 Ltd  PLUSP.L  74.5 
Allianz Technology Trust PLC  ATT.L  66.0 
888 Holdings PLC  888.L  62.7 
Fidelity China Special Situations PLC  FCSS.L  57.6 
Edinburgh Worldwide Investment Trust PLC  EWI.L  57.3 
Renishaw PLC  RSW.L  56.2 
XP Power Ltd  XPP.L  52.6 
Pershing Square Holdings Ltd  PSHP.L  51.0 
William Hill PLC  WMH.L  46.7 
Pets at Home Group PLC  PETSP.L  45.1 
JPMorgan Japanese Investment Trust PLC  JFJ.L  43.4 
Polymetal International PLC  POLYP.L  43.1 
Flutter Entertainment PLC  FLTRF.L  42.8 
Computacenter PLC  CCC.L  41.0 
Kingfisher PLC  KGF.L  40.5 

Source: Reuters

Top US stocks: S&P 500

    Percentage Change 
Name  RIC  YTD 
S&P 500 Index  .SPX  9.4 
ETSY Inc  ETSY.O  232.7 
Carrier Global Corp  CARR.K  175 
NVIDIA Corp  NVDA.O  141.8 
West Pharmaceutical Services Inc  WST  100.7 
Amazon.com Inc  AMZN.O  86.3 
PayPal Holdings Inc  PYPL.O  86.3 
Advanced Micro Devices Inc  AMD.O  83.8 
FedEx Corp  FDX  80.8 
ServiceNow Inc  NOW  80.3 
DexCom Inc  DXCM.O  80.2 
L Brands Inc  LB  76.9 
Rollins Inc  ROL  76.2 
Apple Inc  AAPL.O  69.5 
Catalent Inc  CTLT.K  68.8 
Netflix Inc  NFLX.O  66.8 
Cadence Design Systems Inc  CDNS.O  66.6 
Pool Corp  POOL.O  66.1 
Synopsys Inc  SNPS.O  64.5 
Salesforce.Com Inc  CRM  64.2 
ABIOMED Inc  ABMD.O  62.9 
Tractor Supply Co  TSCO.O  61.5 
IDEXX Laboratories Inc  IDXX.O  60.6 
Regeneron Pharmaceuticals Inc  REGN.O  60.2 
Old Dominion Freight Line Inc  ODFL.O  58.7 
Adobe Inc  ADBE.O  54.9 
Bio Rad Laboratories Inc  BIO  53.6 
eBay Inc  EBAY.O  53.4 

Source: Reuters

Top European stocks: Stoxx 600

    Percentage Change 
Name  RIC  YTD 
STOXX Europe 600 EUR Price Index  .STOXX  -10.3 
Sinch AB (publ)  SINCH.ST  217.3 
Evolution Gaming Group AB (publ)  EVOG.ST  170 
Hellofresh SE  HFGG.DE  155.1 
Nel ASA  NEL.OL  145.1 
Adyen NV  ADYEN.AS  137.2 
Sartorius Stedim Biotech SA  STDM.PA  111.2 
Fresnillo PLC  FRES.L  107.9 
Sartorius AG  SATG_p.DE  101.8 
Pandora A/S  PNDORA.CO  91.9 
Ocado Group PLC  OCDO.L  91.0 
Zalando SE  ZALG.DE  87.9 
Netcompany Group A/S  NETCG.CO  83.4 
Biomerieux SA  BIOX.PA  80.7 
Rockwool International A/S  ROCKb.CO  80.1 
Games Workshop Group PLC  GAW.L  75.9 
Ambu A/S  AMBUb.CO  74.4 
Tecan Group AG  TECN.S  70.8 
Vestas Wind Systems A/S  VWS.CO  68.0 
Addtech AB  ADDTb.ST  67.4 
argenx SE  ARGX.BR  65.9 
DiaSorin SpA  DIAS.MI  64.7 
GN Store Nord A/S  GN.CO  63.3 
Siemens Gamesa Renewable Energy SA  SGREN.MC  63.3 
Adevinta ASA  ADEV.OL  63.2 
Genmab A/S  GMAB.CO  61.9 
Schibsted ASA  SBSTA.OL  61.2 
Kinnevik AB  KINVb.ST  60.8 

Source: Reuters

This page is updated from time to time to reflect changes: last updated Oct 13th, 2020.

Apple event: AAPL shares rise amid 5G iPhone 12 leaks and reveal

Investments

Apple is expected to unveil its new 5G-capable iPhone 12 on Tuesday with investors eyeing how the new product line-up will drive top sales growth in the near-term. It could be the most important event in several years for Apple as it seeks to drive an upgrade supercycle.

Recent earnings from Apple show consumers are a long way from any kind of smartphone or device fatigue – the question is whether 5G is the moment to unleash further demand for iPhones. Meanwhile, we should be careful about ignoring other products set to be released which continue to help cement Apple’s ecosystem loyalty.

The event, screening exclusively online from 10 am Pacific time on Oct 13th, is expected to mark Apple’s delayed and long-anticipated launch into the 5G space. Whilst it’s behind the curve of several manufacturers on this front, penetration rates for 5G phones have not been significant yet.

In many ways, we’ve very much been waiting for Apple to get this party started. Moreover, 5G networks are in early stages. I would anticipate that this is the moment many Apple users have been waiting for and it could mark a device upgrade supercycle as we saw with the X.

Apple’s iPhone refresh will be the first major update since the launch of the X in 2017. Apple is expected to announce four new iPhone devices with a range of sizes and a design that takes its inspiration from the iPad. There will be a number of other ancillary product releases, too, but all that matters for the shares will the reception to the iPhone.

Whilst we have no pricing detail right now, it will be important to watch where Apple chooses to price the new models. We note that the X saw Apple increase its prices without any material loss of momentum in sales. It seems likely that Apple will retain its premium status but release some cheaper iPhones at the lower end of the market.

Sentiment: analysts remain bullish on AAPL but the Insiders signal is bearish. Whilst the stock has slipped since the 4-1 split in late August, this occurred against the backdrop of a broad-based sell-off in the tech sector during the month of September and it remains up around 60% for the year.

Apple share activity

Dan Ives at Wedbush said this is “once in a decade” opportunity for Apple with a third of the almost 1bn iPhones in global use due for upgrade.

“Taking a step back we believe iPhone 12 represents the most significant product cycle for Cook & Co. since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story looking ahead despite a softer consumer spending environment in our opinion,” he said.

Apple shares' analyst consensus.

Apple shares tend to perform solidly in the 60 days after iPhone launch events, albeit this did not happen 2008, 2012, and 2016. Shares rose 3% in pre-market trading on Monday ahead of the event.

Apple will deliver its fiscal fourth quarter earnings on Thursday, Oct 29th. In Q3, the company posted quarterly revenue of $59.7 billion, an increase of 11% from the year-ago quarter, and quarterly earnings per diluted share of $2.58, up 18%. International sales accounted for 60% of the quarter’s revenue and it is expected that non-US iPhone demand will be a key driver in the coming quarters.

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