The 3 Most Profitable Market Themes for 2018
2018 is going out with a bang.
The major averages are resting near all-time highs. Bitcoin is getting volatile. And today marks the final installment of our wildest market guesses for 2018…
At the start of the week, I promised you wouldn’t have to sift through any mundane projections heading into the new year. That’s why I stuck my neck out and predicted some huge moves in stocks. Will the market prove me right or send me straight to the guillotine? We’ll find out in the months ahead.
For our final installment of the 2018 prediction season, I’m hitting you with three rapid-fire market themes this morning. I expect each of these topics to produce more than a few trades in the year ahead.
Let’s get to it…
1. Voice will emerge as the next tech battleground.
The easiest operating system to use is one you can’t see. That’s why we’re seeing the emergence of “smart speakers” like the Google Home and Amazon Echo.
But Google and Amazon aren’t the only major tech players diving deeper into the voice game. Microsoft is rolling out its own smart speaker it developed with Harman Kardon that will use its Cortana language recognition software. But I don’t think Google and Microsoft will catch Amazon in this race…
Most folks don’t list Amazon as a tech company. That’s fair. It’s “officially” a consumer stock—I get it. But this doesn’t mean Bezos & Co. are mailing it in when it comes to groundbreaking technical innovations.
Amazon revealed at CES that there are now more than 7,000 Alexa skills, which Geek Wires explains as “third-party integrations that extend the capabilities of its voice platform.” Alexa developers are in this game to dominate voice. And as Alexa continues to “learn” new skills and integrate with additional products, she will be a force to reckon with in the tech world.
If the company continues developing its Alexa software and associated products, Amazon will indeed own the voice niche. The echo is more than a glorified wireless speaker that displays the weather. Amazon is developing a fully-integrated communications hub for your home.
2. Gold goes nowhere.
The price of gold has risen about 10% in 2017.
That’s not terrible performance. But it’s not exactly turning heads. When you consider bitcoins meteoric rise, the S&P’s 20% gain, and the industrial metals comeback this year, gold’s performance looks downright pitiful.
I don’t think 2018 will be much better. In fact, I think gold goes nowhere next year.
There are simply too many distractions out there for gold to get any attention. Even the prepper crowds have moved on to bitcoin as a so-called “safe haven” investment if the world turns into a nuclear wasteland.
Look for gold to continue its directionless chop in 2018. After all the false moves we witnessed this year, I’m not seeing a tradable edge…
3. Global stocks dominate.
Judging by the huge post-election rally we’ve witnessed, it’s no surprise President Trump is patting himself on the back. If we’re following his official report card, Trump’s tenure gets an “A+” as the market defies the naysayers and blasts higher.
But here’s what they’re not telling you…
Emerging markets are putting America to shame right now. That’s right – the same stocks that couldn’t attract any attention since the financial crisis decimated U.S. stocks in 2017.
As we mentioned earlier, the S&P 500 is up 20% this year. Meanwhile, the iShares MSCI Emerging Markets ETF (NYSE:EEM) has rocketed to gains of nearly 35% year-to-date. This performance puts all the U.S. major indexes to shame – even the red-hot Nasdaq Composite.
There’s a global economic rebound happening right now. But most of us are too fixated on what’s happening in the U.S. to see it unfold. While some investors are dipping their toes in emerging market funds, most folks are content to stay parked in U.S. stocks.
American stocks have been good to investors so far this year. But emerging markets are now the world’s greatest stocks. I expect many investors will finally begin to take notice in 2018 as the global economic boom accelerates…