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Stocks That Will Buck the Tide in 2016
The stock market melted down at the end of 2015 erasing all gains for the year. Then 2016 started with losses as the Chinese stock market fell 7% on the first day of trading and losses followed in markets across the globe. When the news is bad there is a tendency for everyone to sell, even stocks that show promise for the coming year. Although there will continue to be issues that damage the market in the coming year our interest is in stocks that will buck the tide in 2016. Two sectors come to mind, big banks and oil stocks.
Bank Stocks
One sector that has gotten its house in order is banking. And these are the folks who will benefit as the Fed raises interest rates. CNBC discusses why you should big bank stocks now.
Big banks faced a rough end to 2015 followed by a significant sell-off on the first trading day of 2016, but one analyst says now is the time to buy these large-cap bank stocks.
Although Morgan Stanley tumbled more than 11 percent over the course of the last month and JPMorgan fell more than 6 percent, Barclays senior analyst Jason Goldberg thinks there’s a light at the end of the tunnel – and that is the Federal Reserve.
“Banks trade with the global economic environment, so clearly there’s been uncertainty as China’s been in the news obviously of late, and that tends to weigh on the stock,” Goldberg told CNBC’s “Squawk on the Street” on Tuesday. “If the Fed continues to raise rates, margins should expand in 2016 and 2017, and we think that will accelerate both revenue growth and earnings growth,”
If you believe that banks have gotten more efficient during tough times and now will make profits as rates go higher, then these are stocks that will buck the tide in 2016.
Stocks in this sector include Bank of America, HSBC USA, Capital South Bancorp, Wells Fargo and Citigroup.
The other sector, which profits during periods of turmoil, is oil.