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Speculative, expensive and beaten down – the stock market’s new leadership

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Mid-June marked a turning point for the stock market and new leadership has formed for the recent rise, according to Credit Suisse.

Driving returns were stocks that are speculative (high correlation to Bitcoin (BTC-USD)), Expensive (high P/E), Depressed (52-week drawdown), Volatile (high correlation with falling VIX (IX)) and severely shorted.

The S&P 500 (SP500) (NYSEARCA: SPY) is up about 10% since mid-June. During that time, speculative stocks have produced the best equal-weighted return at 16.8%, closely followed by expensive stocks, which are up 16.6%. Beaten Down shares returned 14.6%, Volatile rose 14.1% and Highly Shorted shares returned 10.3%.

“Inflation is expected to decline steadily over the next 24 months, based on both breakeven and economist forecasts, amid falling commodity prices and weaker economic data,” wrote equity analysts at Credit Suisse. “We believe this will result in the Fed turning to more dovish policy towards the end of the year, which supports a continuation of the market’s current rally and factor leadership.”

Here are the top 50 stocks exposed to these factors:

  1. Ceridian (CDAY): Spec, Exp, BD, Vol, HS
  2. American Airlines (AAL): Spec, Exp, Vol, HS
  3. Generac (GNRC): Spec, BD, Vol, HS
  4. Carnival (CCL): Spec, BD, Vol, HS
  5. Caesars (CZR): Spec, BD, Vol, HS
  6. Etsy (ETSY): Spec, BD, Vol, HS
  7. Norwegian Cruise (NCLH): Spec, BD, Vol, HS
  8. Penn National (Penn): Spec, BD, HS
  9. Salesforce (CRM): Spec, Exp, BD, Vol
  10. Intuit (INTU): Spec, Exp, BD, Vol
  11. Paycom (PAYC): Spec, Exp, BD, Vol
  12. Las Vegas Sands (LVS): Exp, BD, Band
  13. PVH (PVH): Spec, BD, Band
  14. Royal Caribbean (RCL): BD, Vol., HS
  15. Tesla (TSLA): Spec, Exp, Vol
  16. Wynn Resorts (WYNN): BD, Band, HS
  17. DexCom (DXCM): Specification: Specification, BD, Vol
  18. Cadence Design (CDNS): Spec, Exp, Vol
  19. Enphase Energy (EPH): Spec., Exp., Vol
  20. EPAM Systems (EPAM): Spec, BD, Vol
  21. Fortinet (FTNT): Spec, Exp, Vol
  22. Monolith (MPWR): Spec, Exp, Vol
  23. ServiceNow (NOW): Spec, Exp, Vol
  24. Nvidia (NVDA): Spec, BD, Vol
  25. PayPal (PYPL): Spec, BD, Vol
  26. SolarEdge (SEDG): Spec., Exp., Vol
  27. Synopsys (SNPS): Spec, Exp, Vol
  28. DISH Network (DISH): Spec, BD, HS
  29. Warner Bros. Discovery (WBD): Exp, BD, HS
  30. Albemarle (ALB): Spec, Vol
  31. Boeing (BA): Exp, BD
  32. Aptiv (APTV): BD, Vol
  33. Bed Bath & Bodywork: BD, HS
  34. Domino’s Pizzq (DPZ): Exp, HS
  35. Expedia Group (EXPE): BD, HS
  36. Ford (F): BD, vol
  37. Abiomed (ABMD): Spec, Exp
  38. IDEXX Labs (IDXX): Exp, BD
  39. Illumina (ILMN): Exp, BD
  40. Market Access (MKTX): Exp, BD
  41. MSCI (MSCI): Spec., Exp

See why the short squeeze trend is getting old.

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Russell Falcon

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