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1 Stock To Buy, 1 To Dump When Markets Open: Goldman Sachs, Robinhood

By Investing.com (Jesse Cohen/Investing.com)Stock MarketsJan 09, 2022 06:49AM ET
www.investing.com/analysis/1-stock-to-buy-1-to-dump-when-markets-open-goldman-sachs-robinhood-200614086
1 Stock To Buy, 1 To Dump When Markets Open: Goldman Sachs, Robinhood
By Investing.com (Jesse Cohen/Investing.com)   |  Jan 09, 2022 06:49AM ET
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Stocks on Wall Street ended lower to wrap up the first trading week of 2022 on Friday. The NASDAQ suffered its biggest weekly drop in almost a year as soaring Treasury yields sparked a massive selloff in many top-rated tech shares.

S&P 500, NASDAQ, And US 10-Year Chart
S&P 500, NASDAQ, And US 10-Year Chart

The U.S. 10-year bond yield jumped 26 basis points for the week, closing at 1.765%, following the midweek release of hawkish Fed minutes. The benchmark note hit a session peak of 1.801% on Friday, the highest level since January 2020.

10-Year Yield Monthly Chart
10-Year Yield Monthly Chart

The week ahead is expected to be another busy one, given the start of Wall Street’s fourth-quarter earnings season, which sees names like JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and Delta Air Lines (NYSE:DAL) all report their latest financial results.

There is also important economic data on the agenda, including the latest consumer price inflation report and retail sales figures.

Regardless of which direction the market goes, below we highlight one stock likely to be in demand in the coming days and another which could see fresh losses. 

Remember though, our timeframe is just for the week ahead.

Stock To Buy: Goldman Sachs

Given the ongoing surge in rates across the Treasury market resulting from growing bets that Fed interest rates will rise faster-than-expected this year, Goldman Sachs Group (NYSE:GS) shares look like a solid investment in the week ahead.

Higher rates and yields tend to boost the return on interest that banks earn from their loan products, or net interest margin—the difference between the interest income generated by banks and the amount of interest paid out to their depositors. That should bode well for Goldman, which has thrived in recent months thanks to signs of robust investment banking activity, a booming IPO market, and a recovering economy.

GS Daily Chart
GS Daily Chart

GS stock is up 3.9% year-to-date and 37.1% in the last 12 months. It ended Friday’s session at $397.51, not far from a record peak of $426.16 reached on Nov. 2. At current levels, the New York City, New York-based financial services firm has a market cap of roughly $132.6 billion.

Goldman, which smashed expectations for earnings and revenue in the last quarter, is scheduled to report its latest financial results before the U.S. market open on Tuesday, Jan. 18.

Consensus estimates call for the investment banking giant, which has beaten Wall Street estimates for six consecutive quarters, to post earnings per share (EPS) of $11.75 for its fourth quarter, declining 2.7% from EPS of $12.08 in the year-ago period.

Revenue, however, is expected to increase 2.2% year-over-year to $12.0 billion, benefitting from an upbeat performance across its investment banking unit and record asset management fees.

Beyond the top-and-bottom line figures, investors will focus on the Wall Street powerhouse’s continuous efforts to return more cash to shareholders in the form of higher dividend payouts and stock buybacks.

Stock To Dump: Robinhood Markets

Shares of Robinhood Markets (NASDAQ:HOOD) could break down to new lows in the coming days as investors continue to worry over the negative impact of several factors afflicting the popular trading platform.

With rates rising rapidly due to the Fed's prep to tighten monetary policy more aggressively than previously thought, unprofitable technology companies such as Robinhood look set for further losses.

In general, higher yields and expectations of more hawkish Fed policy tend to weigh heavily on high-growth tech stocks with lofty valuations, as it threatens to erode the value of their longer-term cash flows.

HOOD Daily Chart
HOOD Daily Chart

HOOD stock—which started trading on the New York Stock Exchange at $38 following the company’s much-hyped IPO in late July—closed Friday’s session at $15.89, more than 80% below its record high of $84.12 touched on Aug. 4. At current levels, the Menlo Park, California-based stock market-trading platform has a market cap of $13.6 billion.

Robinhood next reports earnings after the U.S. market closes on Tuesday, Jan. 25. Consensus calls for a loss of $0.35 per share for the fourth quarter on revenue of $367.5 million.

The financial services company reported disappointing Q3 financial results in late October and warned that lower retail trading activity and seasonal headwinds would likely persist into year-end.

1 Stock To Buy, 1 To Dump When Markets Open: Goldman Sachs, Robinhood
 

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1 Stock To Buy, 1 To Dump When Markets Open: Goldman Sachs, Robinhood

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Comments (15)
Roy Nisani
Roy Nisani Jan 10, 2022 7:21AM ET
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guys guys check this out u going die laughing. December 13, 2020 , which stock he told u to dump? gamestop ... hahaha right before the big run up, he was shorting it hahahaha. whatever this guy tell u to dump, u buy ! "1 Stock To Buy, 1 To Dump When Markets Open: Tesla, GameStop" https://www.investing.com/analysis/1-stock-to-buy-1-to-dump-when-markets-open-tesla-gamestop-200547721
Cory Guy
Cory Guy Jan 10, 2022 7:21AM ET
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Market manipulator. That's why these kinds of headlines are garbage.
Kevin Wilkie
Kevin Wilkie Jan 09, 2022 7:00PM ET
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Bank stocks rule
Vin KE
Win23 Jan 09, 2022 3:06PM ET
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Mintcars LLC
Mintcars LLC Jan 09, 2022 12:46PM ET
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Jesse probably short on hood
Mihai Razvan
Mihai Razvan Jan 09, 2022 12:17PM ET
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i present to you this guy Jesse Cohen the slave of HedgeFunds
Boyoung Schang
Boyoung Schang Jan 09, 2022 12:00PM ET
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Ouch! more pain to come for HOOD?! It's already the rock bottom. What price shall I buy HOOD? Under 10?
Roy Nisani
Roy Nisani Jan 09, 2022 12:00PM ET
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check my comment about him saying sell gamestop at December 2020 🤣
Roy Nisani
Roy Nisani Jan 09, 2022 11:59AM ET
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guys guys check this out u going die laughing loool. December 13, 2020 , which stock he told u to dump? gamestop ... hahaha right before the big run one month later, he was shorting it hahahaha. whatever this guy tell u to dump, u buy ! "1 Stock To Buy, 1 To Dump When Markets Open: Tesla, GameStop" https://www.investing.com/analysis/1-stock-to-buy-1-to-dump-when-markets-open-tesla-gamestop-200547721
Guven Buyukpolat
Guven Buyukpolat Jan 09, 2022 11:53AM ET
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article would be useful if you said dump hood when it was over $40 not under $16. (I don't have hood)
Roy Nisani
Roy Nisani Jan 09, 2022 11:50AM ET
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check this guy past recommendations , pure trash of pump and dump and spread fear to make profit from his shorts.He told u dump alibaba for few months , then told u buy it.He tell u sell robinhood for few months , then in 3 months from now he will tell u buy it.Seriously, why this guys not in jail for violating sec rules...
Jason Lebron
Jason Lebron Jan 09, 2022 11:18AM ET
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VYM, SPYD, XLE, XLF, JETS, DRIV - all started the year winning
Jason Lebron
Jason Lebron Jan 09, 2022 11:16AM ET
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Jesse has been doing better lately. Check out what's doing well XLE, XLF, JETS, SPYD
Rajat Chakraborty
Rajat Chakraborty Jan 09, 2022 11:11AM ET
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Insightful
Tiffany le
Tiffany le Jan 09, 2022 11:10AM ET
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dump you. writer.
Abhishek Shadangi
Abhishek Shadangi Jan 09, 2022 11:10AM ET
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Have you seen the cash in hand on HOOD? Pleas explain how is it not profitable.
Roy Nisani
Roy Nisani Jan 09, 2022 11:06AM ET
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that guy is in big short position on robinhood, not the first time he tell u sell when stock all time low to take a loss. the stock on bargain price now . make him suffer , SEC should jail this criminals "analysts"
 
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