Markets are stalling in the wait for a stimulus bill that could bring a rally through the holidays, and all eyes are on 2021. It’s also a big day for Tesla — its stock price at the end of Friday will determine the weighting of its shares when it joins the S&P 500 next week.
As for the year ahead, our call of the day from Wedbush analyst Daniel Ives has a whole bucket of predictions involving the biggest names in technology.
“Heading into 2021 there is clear momentum for the tech space/stocks as a number of transformational trends such as cybersecurity, cloud, 5G, e-commerce, and autonomous will be front and center for the Street,” Ives said.
On Tesla TSLA, +5.32%, Ives believes the cutting-edge car maker will find continued success with its Giga 3 factory in China, which is slated to begin deliveries of the Tesla Model Y next month, hitting the 250,000 annual delivery target ahead of expectations.
Global demand for electric vehicles should hit “a major inflection point,” reaching 6% of all automobile sales from 3% today, while Ives also expects China’s Baidu BIDU, -0.15% to enter the market through a partnership or acquisition.
But read this opinion: Nio, not Tesla, is the better EV stock pick for 2021
Apple AAPL, +0.70% will emerge as “the clear winner” in next year’s race to dominate in 5G, and break its record for annual iPhones sold, Ives said.
Regulatory headwinds, like the antitrust suits facing tech giant Google, owned by Alphabet GOOGL, -0.95%, and social media platform Facebook FB, -0.43%, could bring fines and pressure from Washington, but no major changes to tech business models or company breakups, according to Wedbush.
Essential reading: Big Tech is turning on one another amid antitrust probes and litigation
On cybersecurity, Ives said the recent Solarwinds SWI, -2.38% software hack will boost spending over the long term and lead to at least 20% budget growth. He also expects consolidation in the sector with aggressive acquisitions from strategic buyers.
Read more: Microsoft was breached in SolarWinds cyberattack, in what one exec calls ‘a moment of reckoning’
Ives sees Microsoft MSFT, +0.06% pulling ahead of Amazon AMZN, -0.15% in the battle of cloud services, and Uber UBER, +0.28% hitting profitability ahead of expectations of a sharp rebound in ride-sharing from commuting and travel.
In bricks and mortar, Ives believes that e-commerce will remain above 20% of total retail sales despite retail coming back post-coronavirus. Real-estate technology will jump ahead, with online markets Redfin RDFN, +5.02% and Zillow Z, +2.61% taking “material share” from traditional brokerages.
The chart
BDSwiss Market Insights
Our chart of the day, courtesy of Marshall Gittler at BDSwiss, shows just how much the U.S. current-account deficit has widened and what’s expected from today’s report for the third quarter. The FactSet consensus is that the current-account deficit will be $188.6 billion — an increase of $18.1 billion from the $170.5 billion deficit in Q2.
The markets
Stock market futures YM00, +0.04% ES00, +0.12% NQ00, +0.08% are pointing down slightly, set for a soft open as the U.S. awaits a stimulus package from Congress. Asian markets fell while European stocks have inched up SXXP, +0.12% as Brexit trade talks continue to hold the spotlight, with officials on both sides saying big differences are standing in the way of a deal with just two weeks left to go. The pound GBPUSD, -0.40% is falling slightly against the dollar, paring yesterday’s gains to near two-year highs.
The buzz
Congressional lawmakers are facing a Friday deadline to pass a coronavirus economic-stimulus package. As talks drag on, it is possible they’ll miss that target as well as the deadline for a bill to continue funding the government — which would cause a shutdown.
A key committee of the Food and Drug Administration has voted that the benefits of Moderna’s COVID-19 vaccine candidate outweigh the risks. The recommendation paves the way for full approval of biotech Moderna’s MRNA, +5.09% vaccine by the FDA.
The U.S. is set to add dozens of Chinese companies, including chip maker SMIC, to a trade blacklist, according to a report from Reuters.
The newest title from CD Projekt CDR, +3.07% was expected to be one of the bestselling games of all time. But initial reviews of “Cyberpunk 2077” on consoles were terrible, and now Sony has pulled the game — which features Tesla Chief Executive Elon Musk and actor Keanu Reeves — from the PlayStation store. Shares are down more than 40% from two weeks ago.
Random reads
Florida’s newly-minted team of python-sniffing dogs found their first snake — a 2.4 meter Burmese python.
A surrealist painting worth more than $250,000, lost at Dusseldorf’s airport, has been recovered from a nearby recycling dumpster.
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