The SPDR S&P 500 (SPY) has been in a strong uptrend this year, and the trend may continue if the Santa Claus rally happens. The fund, which has now become the second-biggest S&P 500 ETF after Vanguard, was trading at $597 on Monday. This article explains some of the top names in the S&P 500 and why ETFs like SPY, VOO, and IVV could reverse soon.

Top SPY ETF companies in 2024

The S&P 500 index has done well this year, helped by the artificial intelligence craze, strong corporate earnings, and the Federal Reserve rate cuts.

The AI wave has helped to push companies like NVIDIA, Microsoft, and Google substantially higher this year. 

Vistra Energy has been the best-performing company in the S&P 500 index this year as it jumped by over 300%.

It was followed by Palantir and Nvidia, which have jumped by 276% and 174%, respectively. This rally has made NVIDIA the biggest company in the world, while Palantir’s market cap has jumped to $150 billion. 

The other top performer in the index is GE Vernova whose shares have jumped sharply since it became a standalone company. Like Vistra, the rally is mostly because of the rising demand for energy prices to power data centers. 

United Airlines stock has jumped by over 134% this year, making it the best-performing airline company in the US. It has also beaten its other global peers like IAG, Lufthansa, and KLM as it continues to boost its profits. 

Constellation Energy stock price has jumped by 112% after the company partnered with Microsoft to restart a major nuclear power plant. The hope is that the firm will provide cheaper energy to power data centers. 

Fair Isaac and Company, popularly known as FICO, has jumped by 102% as demand for credit scores continued rising. The other top performers in the S&P 500 index this year were companies like KKR, Dell, GoDaddy, Oracle, Royal Caribbean, Netflix, and Deckers Outdoor. 

Walgreens Boots Alliance (WBA) was the worst-performing company in the S&P 500 index this year as it tumbled by 65%. The company is going through a rough patch as demand wanes and costs remains elevated. 

Moderna shares have crashed by 56% as demand for the COVID-19 vaccine waned. Dolar Tree shares have retreated as comparable store sales have remained under pressure. 

Intel is another top laggard in the S&P 500 index as demand for its products waned and as it lost market share in the AI industry. 

The other worst-performing companies in the index are firms like Boeing, Biogen, Dexcom, Lululemon Athletica, and Humana. 

S&P 500 index could reverse soon

There are a few reasons why the S&P 500 index ETFs like SPY, VOO, and IVV could suffer a sharp reversal soon. 

First, there is a threat of a trade war, which will hurt most companies in the US. History shows that tit-for-tat has not always worked well for companies that have a presence around the world. 

Second, the ETFs could drop because they have formed a rising wedge chart pattern. On the chart above, we see that the fund has formed two converging trendlines that are nearing their confluence levels. 

In most periods, financial assets tend to have a deep decline when the two lines near their confluence levels. If this decline happens, then the SPY ETF will drop to about $550, which is about 10% below the current level.

Third, the index could drop because of a situation known as mean reversion, where assets often go back to their average prices. If this happens, then it may drop to the 200-day moving average of $540. 

To be clear: such a correction will be brief, meaning that the index will bounce back as it has done in the past.

The post 3 reasons S&P 500 index ETFs like SPY, IVV, VOO will reverse soon appeared first on Invezz

The iShares Russell 2000 ETF (IWM) continued its strong rally, reaching a record high of $244.8 this week. It has jumped by over 51% from its lowest level in 2023 as the American economy avoided a hard landing. This article looks at some of the best and worst-performing Russell 2000 stocks and whether it has more upside to go. 

Top performing stocks in the IWM ETF

Many companies in the Russell 2000 index have done well this year, helped by their respective industries and its strong performance.

Genedx stock has soared by over 2,825% this year, helped by the ongoing demand of genomic testing in the United States. This rally has brought its market cap to over $2.21 billion.

The other top-performing company in the IWM ETF is Sezzle, a leading player in the Buy Now Pay Later (BNPL) industry that is doing well. Like Affirm and Klarna, the company enables users to buy and pay products with four installments. 

Sezzle’s business has been doing fairly well, with its annual revenue surging from $13.3 million in 2019 to over $221 million in the trailing twelve months (TTM). It has also started to make a profit as it made $7.1 million in 2023 after making a $38.1 million loss a year earlier.

Root Inc. stock price has also surged this year as demand for online insurance jumped. Its annual revenue has risen from $275 million in 2019 to almost $400 million last year. As we wrote on Lemonade, demand for online insurance solutions will likely continue rising.

NuScale Power is another top-performing company in the IWM ETF as it jumped by over 750% this year. This growth happened as demand for nuclear energy rose among data center companies like Microsoft and Amazon. Analysts believe that the future of small modular reactors is bright, especially when there is scale. 

Intuitive Machines stock has soared by 474% this year as the company continued to see more demand and increased backlog in its launches. 

The other top-performing companies in the Russell 2000 index are Core Scientific, Nano Nuclear Energy, Avidity Biosciences, Rocket Lab, and Lumen Technologies. 

The Russell 2000 index often has some of the best-performing companies in Wall Street. However, it also has a good track record of having some notable laggards. Canoo stock price has crashed by over 92% this year as concerns about its viability continues. 

The other notable laggard in the index is Virgin Galactic, a company that has been in the business for over 20 years. Analysts expect the company to run out of money in either 2024 or 2025.

Other companies that have underperformed the market this year are Marketwise, Luminar Technologies, Cassava Sciences, Chegg, and Digital Turbine. 

IWM ETF analysis

IWM chart by TradingView

The weekly chart shows that the Russell 2000 ETF has been in a strong bullish trend in the past few months. It has now formed a cup and handle, which is made up of a rounded bottom and a consolidation at the top.

To estimate the target with the C&H pattern, one needs to measure the size of the cup and extrapolate it from its upper side. In this case, the depth of the cup is about 33%, meaning that the fund could jump to $325 in the longer term.

The IWM Fund has also remained above the 50-week and 200-week Exponential Moving Averages (EMA), a sign that there is still demand. Oscillators like the Relative Strength Index (RSI) and the MACD have all pointed upwards. 

Therefore, the IWM Fund will likely continue rising although some consolidation is possible as it forms the handle section of the C&H pattern.

The post IWM ETF hits ATH: Here’s why Russell 2000 rally will go on appeared first on Invezz

The Nasdaq 100 index jumped to a record high this year, helped by the ongoing artificial intelligence wave and the Federal Reserve interest rate cuts. It soared to a high of $21,185 this month, bringing the year-to-date gains to 22.50%. This article looks at the best and worst performers in the index and why the Invesco QQQ ETF (QQQ) may reverse soon.

Technology companies are doing well

The Nasdaq 100 index has jumped, helped by NVIDIA, which has turned into the biggest company in the world with a valuation of over $3.4 trillion. NVIDIA’s growth happened as the company continued to fire on all cylinders, with its revenues in the first nine months of the month jumping to over $91 billion. 

NVIDIA’s chips have seen substantial demand in the past few years, as companies like Microsoft, Google, and Amazon continue purchasing tons of them. The company has also benefited from its CUDA software that helps to configure general-purpose GPUs into ones that can be used in the AI industry.

Constellation Energy stock has also jumped by 112%, making it the second-best performer in the Nasdaq 100 index. This stock surged after the company inked a partnership with Microsoft, the third-biggest company globally. The deal will see it restart a nuclear power plant and supply it to MSFT’s data centers.

Arm Holdings, a top British company, has also done well this year as it jumped by 85%. Like NVIDIA, this performance is because of the AI industry. Also, Arm has one of the best business models since it mostly licenses its technology, which explains why it has a gross margin of 96%. 

Trade Desk and other companies providing advertising technology like Zeta Global have done well amid resilient demand. TTD shares have soared by about 80% this year, making it one of the top performers in the index.

The other top gainers in the Nasdaq 100 index this year are firms like Netflix, Meta Platforms, Fortinet, Intuitive Surgical, Marvell Technology, T-Mobile, and Broadcom. 

A clear theme among the top performers is that most of them are in the artificial intelligence space that is booming. 

The top laggards in the Nadaq 100 index are companies like Moderna, Dollar Tree, Intel, Biogen, Dexcom, Lululemon, Pdd Holdings, Globalfoundries, Idexx Laboratories, and Microchip Technology.

Why the QQQ ETF stock may drop

The Nasdaq 100 index has a long history of doing well and has constantly beaten other indices like the S&P 500, Russell 2000, and the Dow Jones. This growth happened because it is mostly made up of technology companies that have a track record of growth.

Tech companies often have large moats, predictable revenues, and high margins. Think of a company like NVIDIA that has constantly innovated and launched new products that are hard to replicate.

Still, there are three main reasons why the QQQ ETF may reverse soon. First, the fund has become highly overvalued as it trades at a PE ratio of 36. This is a big number, meaning that the index could go through a valuation reset soon, especially now that some companies are slowing down.

Nasdaq 100 index chart by TradingView

Second, the index could go through mean reversion, where an asset moves back to the moving average. In this case, it could drop by about 8.7% to move to the 200-day Exponential Moving Average (EMA). 

Finally, the index, just like the S&P 500 index, has formed a rising wedge pattern, a popular bearish sign. This pattern has more room to run before it gets to its confluence zone, meaning that the correction could happen in 2025 as Donald Trump restarts his trade war.

The post Here’s why Nasdaq 100 index ETF like QQQ could drop soon appeared first on Invezz

United Airlines (UAL) stock price is beating other global airlines like IAG, the parent company of British Airways, Delta, American, and Southwest. Its stock has jumped by 150% this year, while IAG has jumped by 71.35%, Southwest’s 16%, and Delta Air Line’s 61%. This surge has brought its market cap to over $31.8 billion.

United Airlines stock price crossed a key level

The weekly chart shows that the UAL share price has been in a strong bullish trend in the past few months. It has risen for 16 consecutive weeks, something it has never done before.

The stock also recently made a golden cross pattern as the 50-week and 200-week Exponential Moving Averages (EMA) crossed each other. In most periods, this is usually one of the most bullish patterns, especially, when it happens on the weekly chart.

United Airlines shares have also crossed the important resistance level at $64, its highest level in March 2021. Most notably, it has now just flipped the crucial resistance point at $95.85, its highest level in July 2019. 

Other technicals are also bullish on the United Airlines share price. The Relative Strength Index (RSI) and the MACD indicators have continued to point upwards, with the former being at the extremely overbought level.

Therefore, there is a likelihood that the stock will continue rising as bulls target the next key resistance level at $100. Still, the risk is that airlines are usually highly cyclical companies that rise and fall. As such, there is a likelihood that it will suffer a harsh reversal in the near term.

UAL stock chart | Source: TradingView

Why UAL stock is beating its peers

There are several reasons why United Airlines is doing better than its global peers like Delta and American.

The most important one is that the company did not fire its pilots during the COVID-19 pandemic. As such, when the industry reopened, it had ready staff as other companies battled with a substantial shortage.

The company has also been at the forefront of its fleet modernization process, a costly move that will make it a more profitable firm in the future. It has ordered 110 new aircraft that will start being delivered in 2028. These places are 50 787-9s and 60 Airbus A321neos. Altogether, its order book is of about 270 planes.

The company has also options for 50 787 and 40 more A321neo planes. It has also ordered 20 Boom Overture supersonic jets that are estimated to be faster and more efficient than the Concorde. 

United Airlines is also growing at a faster pace than other companies. Its forward revenue growth is 10%, while Delta and American have much lower metrics. 

Most importantly, this growth has come at a profitable level, a situation that has made UAL the second most profitable airline in the US after Delta. It has a net profit margin of 4.95% compared to Delta and America’s 7.7% and 0.51%.

Read more: United Airlines to ‘capitalise on opportunity only $UAL has’ after Q1 earnings

The most recent financial results showed that United’s pre-tax earnings came in at $1.3 billion as its earnings per share jumped. As a result, under Scott Kirby, United Airlines has started to return substantial sums of money to its shareholders, which explains why its stock has jumped. 

In the last quarterly earnings, United Airlines said that it would repurchase up to $1.5 billion of outstanding shares. It is also adding new routes to Mongolia and Greenland in a bid to provide more services to its customers. 

Additionally, the company is increasing its US business, where it is the third-biggest player. To do that, the company is up gauging, where it is replacing its smaller planes with bigger ones. 

Therefore, United Airlines stock is soaring as investors cheer the shareholder returns and the hopes that it can catch up with Delta in terms of profitability. 

The post Here’s why United Airlines stock is beating American, IAG, Delta appeared first on Invezz

Buy Now Pay Later (BNPL) stocks are doing well this year as it becomes one of the common ways for people to do their shopping. Affirm, one of the most popular BNPL companies, has risen by almost 50% this year, beating the S&P 500 index. 

Similarly, Block, formerly known as Square, and the parent company of AfterPay, has risen by 25.6% this year. In Australia, Zip shares have jumped by over 400% this year, making it one of the best-performing companies in the industry.

In Sweden, Klarna, one of the top companies in Europe, has announced that it will launch its Initial Public Offering (IPO) soon. Analysts expect that it will receive a valuation of between $20 billion and $15 billion, much lower than the $47 billion it received a few years ago. 

This report focuses on Sezzle (SEZL), the best-performing BNPL stock in the United States this year.

Why Sezzle stock has jumped

Sezzle stock price has jumped by almost 2,200% this year, making it one of the top performers in the Russell 2000 index. This jump has helped to bring its market cap to over $2.2 billion. 

Sezzle is similar to other BNPL companies in that it lets users buy products and pay in equal installments. Its primary product is known as Pay-in-Four, and it lets customers pay a fourth of their purchases up front and then another fourth every two weeks. 

Unlike credit card companies, Sezzle does not charge customers for these products as long as they pay on time and link their banking details on the platform. As a result, it makes money through late fees and commissions it receives from retailers. 

The company has also launched another product known as Pay-in-Full, which allows them to pay upfront using the platform. The benefit is that these customers can build their reputation and ensure that they are not denied credit in future. 

Sezzle also offers a Pay-in-Two solution that is open to customers who don’t qualify for the pay-in-four offering. Its other solutions are the Sezzle Virtual Card, Sezzle Anywhere, Sezzle Premium, and Sezzle Up.

SEZL growth is continuing

These flexible offerings have helped the company supercharge its growth in the past few years. According to SeekingAlpha, its annual revenue has jumped from over $13.3 million in 2019 to over $159 million last year. Its revenue has soared to $221 million in the trailing twelve months.

Analysts are optimistic that Sezzle’s revenue will continue growing in the next few years. Precisely, they believe that its annual revenue will rise to $247 million this year followed by $326 million next year. This growth prospects explains why its stock has jumped sharply.

Most importantly, Sezzle has managed to turn a profit, with its trailing twelve-month profit jumping to over $56.1 million. Also, it has partnered with WebBank, a Utah bank that will be the originator of its loans.

The most recent financial results showed that its business was continuing to see strong growth. Its active subscribers for its premium service jumped to 529,000 from 210,000 the same quarter in 2023. 

Sezzle’s active customers jumped to 2.6 million, while the number of merchants on its platform jumped to 274,000. 

Its revenue growth continued in the last quarter, jumping by 71.3% and hitting $70 million, while net income jumped to over $15 million.

Sezzle stock price analysis

The daily chart shows that the SEZL share price has been in a strong bull run in the past few months. It has remained above the 50-day and 25-day Exponential Moving Averages (EMA).

Sezzle has also moved above the Ichimoku cloud indicator, meaning that bulls are in control. The Relative Strength Index (RSI) has been in a strong uptrend. Therefore, the stock will likely continue rising as bulls target the key resistance level at $500. 

The post Forget Affirm, Block, and Klarna; this BNPL stock is killing it appeared first on Invezz