Stocks to watch as bond yields fall

Long gone are the days of individual price action in the financial market, as an asset class such as stocks, bonds, or commodities moved independently without pressure from others. However, the past few decades have changed all that, especially as more participants join the stock market and data becomes available almost instantly in the palm of investors’ hands.

Knowing this, investors need to pay attention to different price actions across asset classes to determine where the next wave of volatility (and opportunity) may be. That’s why the current decline in bond prices, combined with the opposite rise in bond yields, can signal to investors what other asset classes or specific stocks may do in the coming months, if not quarters.

To follow this theme, investors can look to iShares 20+ Year Treasury Bond ETF NASDAQ: TLTwhich was created to track price action in the overall long-term Treasury bond market. The impact of a potential bottoming in the ETF, particularly around the $87 a share mark, will be clarified for Technology stocks like Intel Co. NASDAQ: INTC or Energy stocks like Occidental Petroleum Company NYSE: OxyBut especially for discounted shares Celsius Holdings Inc. NASDAQ: CELH.

Why Bonds May Rally Soon

Simply put, when bond prices go down their yields go up. This generally means that the market is calling for—or at least expecting—inflation scenarios to rebound in the broader United States economy. However, price action in domestic markets viz iShares Russell 2000 ETF NYSEARCA: IWM or SPDR S&P Regional Banking ETF NYSEARCA: KRE Will show more.

This price action will mean that bonds may be wrong in their high yield assumptions, so their prices will soon have to go down and adjust their yields in a bull run in the coming months. With this rally and low bond yields, the stocks on today’s list will make a lot of sense for investors to keep in their portfolios.

Bottom case in Intel stock

Now that Intel trades at low levels 40% of its 52-week highThere are reasons to believe that low yields and interest rates could make this stock a potential buy today. This is especially the case because the government is giving Intel most of its budget under the CHIPS and SCIENCE Act, meaning Intel can lead the domestic production of semiconductors.

So Wall Street analysts now agree Price target of $30 per share On the stock, it’s asking for 50% more than where it trades today. Bonds are sending the message that deflation may not be the result and that an easier financial environment may instead be a reality.

Not surprisingly, those on State Street decided to increase their Intel stock holdings by 2.8% through November 2024, increasing their net positions. $4.6 billion is the highest level or 4.6% ownership in the company. This is a bullish sign for investors to consider holding Intel stock in their own portfolios.

Celsius stock needs a boost

After the decline in price with PepsiCo Inc. NASDAQ: PEP And The Coca-Cola Company NYSE: KOAs shares of Celsius traded lower 26% of their 52-week high. However, lower bond yields will have two implications for the company’s consumer base.

First, if inflation isn’t really an issue, people can spend more freely on discretionary items like energy drinks. Second, lower credit card rates will only serve as another tailwind to this broader theme. With this in mind, investors will not see $50.3 a share price target Celsius is currently held in stock.

To achieve this, a net rally of up to 91% from today’s prices is required, giving Celsius stocks one of the best risk-to-reward ratios in the industry.

Warren Buffett: Again with Occidental Petroleum

Lower bond yields bring more business activity and trading, as financing rates and liquidity become more abundant. This may explain why Warren Buffett chose to buy up to 29% of Occidental Petroleum, knowing that energy stocks do well in this type of environment.

But Buffett wasn’t the only one willing to express his bullish view on the company. Mizuho analysts now watch the stock trade A maximum of $70 per share through its December 2024 price targets, which call for a net upside of 42% from where the stock trades today.

More than being a bull, Buffett is a trap $2.9 billion institutional capital That made its way into Occidental Petroleum stock over the past 12 months, showing a more optimistic dimension for investors to consider for this stock in the coming months and quarters.

Before you consider Intel, you might want to hear this.

MarketBeat keeps track of Wall Street’s top-rated and best-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified Five stocks That top analysts are quietly telling their clients to buy now before the broader market hits… and Intel wasn’t on the list.

While Intel currently has a “Reduce” rating among analysts, top analysts believe these five stocks are better buys.

Check out five stocks here

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