What stocks are to watch for in 2021? Investors should not expect another strong rise in stocks over the next six months after the S&P 500 ended the first half of the year up about 15%. Instead, the stock market is likely to consolidate sideways over the next six months as investors focus on higher interest rates.
Despite the ambitious price targets for the S&P 500 index among many CNBC respondents, even some optimistic respondents said they would be watching closely to see how the pandemic develops and the steps governments are taking to stimulate the economy.
“I predict 15% growth as the world plunges online. Central banks around the world have flooded the economy with liquidity to the maximum to stop the market crash, so calmer market conditions provide an excuse for the next phase of the bull run,” shared the analyst, who highlighted “a delay in the implementation of an additional stimulus package, another wave of Covid-19 and a possible vaccine shortage” as potential negative events.
Which stocks to prioritize in 2021
When asked which stocks and sectors investors should bet on in 2021, most analysts said they liked low-cost “cyclical” stocks that would benefit from a post-coronavirus economic reopening. Among the stocks analysts recommended for buying and holding in 2021 were Exxon Mobil, Chevron, Baker Hughes, Boeing, Qualcomm, Visa and Disney.
“Qualcomm stock will hit $170 apiece by the end of 2021,” said one analyst, who named the company as one of the main beneficiaries of the rollout of next-generation 5G networks.
But overall, the analysts interviewed said rather little about the tech companies that are market favorites in 2020. One strategist noted the following: “Google stock is still worth buying (12-month price target is $2119 apiece) as the company plays catch-up with other tech giants. Customer ad spending is starting to rise again as travel and tourism demand slowly recovers.”
A prominent institutional investor who participated in the survey advised favoring emerging markets, predicting an 18% growth potential for the MSCI Emerging Market Index by the end of 2021. In August, CNBC International conducted a similar poll of analysts asking their views on the presidential election. Fourteen out of 20 at the time predicted Joe Biden would win.
The U.S. dollar and other currencies
Strategists shared their predictions for currencies. Only three experts named the U.S. dollar as their favorite among the dollar, euro, yuan, yen and pound. Six out of 20 believe the euro will make the biggest gains in 2020, with seven experts picking the Chinese yuan. A major institution that took part in the survey predicts that the yuan will reach 6.25 against the dollar by the end of 2021.