There are some powerful trends driving the market these days, trends that could have a big impact on several stocks I will closely watch this fall.
This week’s market action was primarily driven by uncertainty – and subsequent relief – about what the Federal Reserve might say about interest rates.
But Federal Reserve Chair Janet Yellen’s comments aren’t the only major driver of market movement. New technology entering the market and high-flying momentum stocks continue to dominate the headlines.
Here are three stocks that you should watch this fall.
Fall Stock #1: Tesla Motors (Nasdaq: TSLA)
Tesla shares took a big hit at the start of this week, falling 9% Monday while the rest broader markets were largely flat. Sister company SolarCity (Nasdaq: SCTY) also fell around 9% on Monday.
The drop in shares seems to have been brought on by a note from Morgan Stanley analysts suggesting that Tesla’s stock has risen too fast, though they maintained a price target of $320 per share, significantly higher than Tesla’s $280 price tag going into Monday.
Just last week, Chairman and CEO Elon Musk himself said that investors get “carried away” with Tesla stock price. “I think our stock price is kind of high right now.”
Even after Monday’s drop Tesla shares remain up 75% for the year and over 750% over the last two years.
Perhaps this is the beginning of a major correction for Tesla shares. Or perhaps this is a sign that momentum investors are taking a pause to reevaluate before sending shares higher. Time will tell.
Fall Stock #2: Regions Financial (NYSE: RF)
A few weeks ago my colleague Marshall Hargrave wrote an article offering three ways to prepare for rising interest rates.
With rates at historical lows it is only a matter of time before the Federal Reserve senses that the economy is strong enough to begin raising them. So what does Marshall recommend investors do to prepare? Turn to regional bank stocks.
I like Regions Financial, a regional bank operating in the South and Midwest. With 90% of its income coming from businesses and consumer banking services, it isn’t involved in complicated financial instruments like the too-big-to-fail banks.
It is also one of the most efficient banks in the industry.
Regions’ balance sheet is “asset sensitive,” meaning that it will be positively impacted by rising interest rates. It’s only a matter of time before rates rise and I expect Regions Financial to rise along with them.
Fall Stock #3: Apple (Nasdaq: AAPL)
The iPhone 6 and iPhone 6 Plus are the most significant changes Apple has ever made to the iPhone, which is easily Apple’s most important source of revenue. With two new sizes, new chips, new screens and a new mobile payment system, the next few months will be critical for Apple.
Apple is also launching wearable devices for the first time with the Apple Watch.
The device isn’t expected to go on sale until 2015 but, as we’ve seen before, hype can drive Apple stock as much as actual results. It will be interesting to see how the market reacts as we learn more about the device and the company’s strategy when it comes to the Apple Watch.
With the market expecting changes to interest rates anytime now, momentum stocks pushing record highs and major changes to Apple’s offerings, these are certainly three great stocks to watch this fall. Follow along with us as we keep you up to date with the latest.
DISCLOSURE: I personally own shares of Apple.
How the iPhone 6 unveiling impacts mobile
Tim Cook wrote, “iPhone 6 and iPhone 6 Plus — which are the biggest advancements in iPhone history…” after unveiling the most technologically advanced phone on the planet with cautious estimates have them selling 200 million of them. While we love Apple, we’re recommending a much less known company today…a company no one is talking about. A company that provides the technology, without which, smartphones couldn’t exist.