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Here are Wall Street’s favorite stocks for an election-relief rally

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Until Election Day, and maybe for a few weeks afterward if voting results are disputed, expect warnings about stock market volatility. But history has shown the market tends to rally after elections.

Charles Lemonides showed that following the past nine presidential elections, the stock market staged long rallies no matter which party won.

Something else to consider, no matter how the election turns out, is the likelihood of another round of stimulus out of Washington. The two parties are far apart at the moment, but both agree that more assistance is needed for business and families. It isn’t a stretch to expect another round of checks to go out and to see improvement in economic numbers as a result.

A broad rally

On a more technical note, Ned Davis Research analysts Ed Clissold and Thanh Nguyen believe the market’s rally over the past several weeks points to a continued bull market in 2021.

The S&P 500 Index
SPX,
-0.35%

 produced a six-month gain of 45% from its 2020 closing bottom on March 23 through Sept. 23. Following that advance, the benchmark index rose another 8% through Oct. 14, with 90% of its components showing increases. Such a wide breadth of gains following the tremendous rally “implies a double-digit annual pace” of returns for the index over the long term, the analysts wrote in a note to clients.

So for long-term investors, rather than day-traders or market-timers, the stage is set for a 2021 stock market rally.

Wall Street’s favorites

Looking at ratings for the S&P 500 among sell-side analysts polled by FactSet, there are 94 stocks rated “buy” or the equivalent by at least 75% of the covering analysts.

Sorting those 94 stocks by implied 12-month upside potential based on consensus price targets, it is clear the analysts expect downtrodden energy stocks to see the biggest bounce. That might seem far-fetched — the energy sector has been by far the worst performer among the 11 S&P sectors this year, with a 49% decline through Oct. 14. But if the sector were to rise 50% from there, it would still be down 23.5% from where it was at the end of 2019.

Among the 10 S&P 500 stocks rated “buy” by at least 75% of analysts that show the most “upside,” nine are energy names. Stretching the list to the top 25, 10 are in the energy sector. Here they are, with the non-energy names to follow. Scroll the table at the bottom to see all the data:

Company

Ticker

Share ‘buy’ ratings

Share neutral ratings

Share ‘sell’ ratings

Closing price – Oct. 14

Consensus price target

Implied 12-month upside potential

Total return – 2020

Diamondback Energy Inc.

FANG,
-1.13%
89%

11%

0%

$30.49

$56.57

86%

-66%

Devon Energy Corp.

DVN,
-0.59%
76%

24%

0%

$9.32

$16.42

76%

-62%

Baker Hughes Co. Class A

BKR,
+2.20%
81%

19%

0%

$13.15

$20.23

54%

-47%

Valero Energy Corp.

VLO,
-1.55%
86%

9%

5%

$41.71

$64.11

54%

-53%

Marathon Petroleum Corp.

MPC,
+0.06%
76%

24%

0%

$29.91

$45.67

53%

-48%

Concho Resources Inc.

CXO,
+1.99%
89%

11%

0%

$48.66

$72.73

49%

-44%

Pioneer Natural Resources Co.

PXD,
+1.82%
91%

9%

0%

$90.09

$130.88

45%

-39%

Phillips 66

PSX,
-0.77%
95%

5%

0%

$52.08

$75.63

45%

-51%

ConocoPhillips

COP,
+2.07%
89%

11%

0%

$34.53

$48.72

41%

-45%

Williams Cos. Inc.

WMB,
+0.22%
80%

20%

0%

$19.68

$24.52

25%

-11%

Source: FactSet

Click on the tickers for more about each company.

Here are the 15 non-energy S&P 500 stocks rated “buy” or the equivalent by at least 75% of analysts covering them, with the highest 12-month upside potential, based on consensus price targets:

Company

Ticker

Share ‘buy’ ratings

Share neutral ratings

Share ‘sell’ ratings

Closing price – Oct. 14

Consensus price target

Implied 12-month upside potential

Citigroup Inc.

C,
+0.55%
81%

19%

0%

$43.03

$63.92

49%

Cigna Corp.

CI,
+1.32%
89%

11%

0%

$174.49

$241.44

38%

CVS Health Corp.

CVS,
+0.77%
75%

25%

0%

$58.51

$79.29

36%

L3Harris Technologies Inc.

LHX,
-1.50%
100%

0%

0%

$176.35

$236.45

34%

Leidos Holdings Inc.

LDOS,
-0.76%
86%

14%

0%

$88.49

$118.00

33%

CarMax Inc.

KMX,
+0.77%
81%

13%

6%

$91.58

$122.00

33%

NRG Energy Inc.

NRG,
+1.57%
80%

20%

0%

$33.71

$44.44

32%

Las Vegas Sands Corp.

LVS,
+1.03%
78%

22%

0%

$44.98

$59.25

32%

Raytheon Technologies Corp.

RTX,
+0.05%
75%

25%

0%

$59.94

$78.18

30%

LKQ Corp.

LKQ,
+1.89%
83%

17%

0%

$30.96

$40.33

30%

Centene Corp.

CNC,
+1.16%
90%

10%

0%

$65.19

$83.03

27%

General Motors Co.

GM,
+1.54%
82%

18%

0%

$31.67

$40.33

27%

Northrop Grumman Corp.

NOC,
+0.21%
82%

14%

4%

$314.89

$394.45

25%

Fiserv Inc.

FISV,
-1.68%
81%

16%

3%

$102.71

$126.88

24%

Micron Technology Inc.

MU,
-0.79%
79%

18%

3%

$51.63

$62.86

22%

Source: FactSet

Don’t miss:Here are five stocks to own for the 5G network buildout



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Video: SEC's Hester Peirce on why the U.S. is behind the curve on crypto

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S.E.C. Commissioner Hester Peirce on the outlook for crypto regulation, and whether this will finally be the year we see a Bitcoin ETF.





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My husband doesn’t get along with my son. I brought most of the wealth into our marriage. How do I split my estate?

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Dear Quentin,

How do couples typically handle their estates in a second marriage? My husband and I have been married for seven years, and it is the second marriage for both of us. I have one adult child from my previous marriage; he has no children.

I brought the majority of our wealth to our marriage, including almost $1 million in my 401(k) and a nice home that is almost paid off; otherwise, we have no debt. My husband and I bought a second home together. We work hard to fund our new 401(k)s, and own a successful business together.

I am turning 65 this year, so estate planning is long overdue. My husband is five years younger than me, and we are both in very good health. We have two issues facing us: I see our retirement as living very comfortably on the monthly income generated by our 401(k)s, pension, Social Security, etc., and leaving whatever may be left to my son.


‘The other issue is that my husband no longer gets along with my dear son at all, and feels no obligation to get along with him.’

I am not interested in scrimping, but I want to be able to have enough money to last us until age 90 (or beyond) by not touching the principal. My husband is more interested in dipping deep into our savings, and living it up in retirement while we are young enough to enjoy it.

The other issue is that my husband no longer gets along with my dear son at all, and feels no obligation to get along with him, to the point that neither one wants anything to do with the other. As far as he is concerned, my son doesn’t meet his expectations, and so deserves nothing from me and certainly nothing from him.

I want my estate planning to be fair to both my new husband and my son. How do people typically handle this type of quandary? I think that I need to create some type of trust to pass on my share of our estate to my son. My pre-marriage assets involved my son as I pursued my graduate degree through night school and worked long hours throughout his childhood.

Second Wife

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

Dear Second Wife,

Don’t allow your husband’s feelings toward your son to influence your estate planning.

Your relationships with your husband and your son and your own plans for retirement are all fair game when making decisions about your estate, but your husband and son’s fractured relationship is their business, not yours. You worked hard for this money, and your son is your legal heir. Any effort by your husband to spend all of your savings and fritter away any inheritance that you intended to leave to your son should be resisted at all costs.

You have worked too hard your entire life to compromise your plans for a comfortable retirement where you have money set aside for long-term medical care insurance, unforeseen emergencies and/or your son. If you jointly own your home, you can leave your half to your son in your will, and specify it can only be sold after your husband passes away.

If you own the home, you can give your husband a life estate. Your son would pay capital-gains tax on the value of your home when he sells it, and not when you bought it. You could also make your son the beneficiary on your life-insurance policy, and/or gift him a certain amount of money per year to see how he manages and spends that money.

Figure out what is fair to yourself first before moving on to what is fair to your husband and your son. It’s OK to put your needs first. I caution against your dipping into savings at a rate that is beyond your own risk tolerance.

Ultimately, you are entitled to leave all other separate property to your son when you die — and, along with a financial adviser, set up a trust with that in mind for you, your husband and your son. Not necessarily in that order.

The Moneyist: ‘I cut his hair because he won’t pay for a haircut’: My multimillionaire husband is 90. I’ve looked after him for 41 years, but he won’t help my son

Hello there, MarketWatchers. Check out the Moneyist private Facebook
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-0.18%

 group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.



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These money and investing tips can help you make a place for crypto in your portfolio

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Don’t miss these top money and investing features:

These money and investing stories, popular with MarketWatch readers over the past week, can give you a better understanding of bitcoin and other cyrptocurrency, and help you figure out if digital currency has a place in your portfolio alongside stocks, bonds and other traditional assets.

Sign up here  to get MarketWatch’s best mutual funds and ETF stories emailed to you weekly!



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