Introduction
Over the last few days, the market has been suffering through a infamous downturn that has been affecting even the most prestigious stocks. There were plenty of reasons for this downtrend. The most significant reason is the fear surrounding the recent job reports, and the possibility of a recession. While this may seem like an unfortunate loss this could be an opportunity of a lifetime to accrue enormous gains by buying high rating stocks such as Arm, Nvidia, and Novo Nordisk, while they are at a cheap price.
One of the primary reasons for the market’s downward spiral is the apparent shortage in jobs. Analysts predicted 175,000 new jobs for the month of July, however employment only increased by 114,000. About 60,000 less jobs than expected. Investors worry that the economy is slowing down too much. In fact, the unemployment rate has risen .6% from its lowest average in January. According to the Sahm rule, the economy has entered a recession. While investors understand that the market has not entered a recession, investors worry about the likelihood of entering such a state.
While many people are responding bearishly to the recent crash this is actually a great opportunity to buy high rating stocks at a cheap price. According to the Elliot wave theory, an economic theory examining the way the stock market moves, the market is in its correcting phase, and will eventually return to its motive phase offering even greater returns by the end of its cycle. So what stocks should you buy before the corrective wave has run its course?
Nvidia (-21.35%)
Nvidia, a legendary technology stock known for its revolutionary software innovations such as Compute Unified Device Architecture (CUDA), Graphic Processing Unit (GPU), and so much more. Additionally, the company is known for its rapid growth rate of 43% a year. Making it one of the fastest moving stocks on the S&P 500. Considering the recent ten to one split the stock is on average worth $130 per share, and should only increase long term.
The company is now focusing on advancing AI learning to be used in improving the functionality of humanoid robots. Humanoid robots may not be available to everyday individuals, with rapid technology development there is no doubt that society is heading that direction. With flying cars, and computers that can learn now just imagine what the world will be like in 10 years. Perhaps there will be an Artificial Intelligence robot in every house helping with daily tasks. I believe with all companies so focused on AI and what it can do the AI race is getting too broad and too close to be able to get ahead in the way Nvidia is by focusing on the next big technological innovation, while still employing resources on AI ino order to not miss out on any more gains it can receive from the AI race.
Novo Nordisk ( -5.73%)
Novo Nordisk (-5.73%)
Novo Nordisk is well known for its groundbreaking research in diabetes and weight loss. Two topics that are becoming more and more relevant in today’s society. Novo Nordisk has made revolutionary contributions to ending diabetes and weight loss around the world. Most notably, their revolutionary drug Wegovy, which continues to be so strongly desired that people have to be put on years-long wait lists in order to receive the medication.
Currently, Novo Nordisk is working on a new weight loss product that is meant to beat out even Wegovy in efficiency. In early clinical trials This weight loss drug, Amycrentin has lead to participants losing more than double the body weight they lost on Wegovy. While the trial was small, and more testing of this miracle drug is expected. The results foreshadow the drug to be more successful than Wogovy.
In addition to diabetes and weight loss drugs, the company has a strong focus on Alzheimer. Currently, the company is trying to re-invent their popular diabetes drugs, Victoze and Saxenda, as Alzenheimers drugs meant to decelerate the progression of dementia in adults and teenagers. The reason for this sudden rebranding is that Liraglutide, a synthetic chemical in both Victoze and Saxenda, increases insulin activity in the brain, which stimulates the production of Tau Proteins, which play a key role in keeping the nerve cells in the brain strong and secure. If all goes well investors will see a huge uptick in sales of Victoze, Saxenda, and even a new drug Amycrentin. When comparing the drugs to previous successes it’s easy to see how these new and improved drugs can lead to the value of Novo Nordisk to sky rocket.
Crude Oil (-.99%)
While oil prices may be at an all time low however, this price drop can’t hold forever. Over the course of the week, both Crude Oil and Brent Oil company traded at around $75 per barrel. A small increase, despite the market crash. If the price of these oil companies are going up while the market is in a declining state, just imagine what it would do if the economy was booming. I imagine the price would reach at least 80 if not more.
In addition, the conflicts in the middle east are likely to cause an increase in the oil price. With tensions high between Iran and Israel, especially after Israel’s attack on a Hamas leader, it is a wonder what Iran will do next. Although, In foreign minister, Ali Bagheri Kani words “ The act that the Zionists carried out in Tehran was a strategic mistake because it will cost them gravely.” This could be a simple opinion on how the world would react negatively to the assassination of the Hamas leader, however more likely this is a warning. Hinting at a strike against Israel. A strike that could catapult the war to an entire new level of violent, and unpredictable. Historically, an increase in conflict between Israel and Iran has lead to an increase in oil prices. In conclusion, I believe that with the conflict deepening America will soon be suffering the effects of high oil prices and as a result the market price of oil companies will go up.
Overall Market Outlook
In conclusion, while the market is receding into what could eventually become a recession this might actually be the perfect opportunity to get appreciated stocks at a low price. Stocks like Nvidia, Novo Nordisk, and Crude oil, which are usually unattainable with their high prices and fast growth rate, had for the first time in a long time regressed to a value that catered to the everyday investor. There is no need to fear this decrease though. While the recent disappointment regarding the job market alarmed investors there is no doubt the market will soon return to its former glory. Possibly generating even greater returns.
Bibliography
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Constantino, Annika Kim. “Older GLP-1 Drug from Novo Nordisk May Slow Alzheimer’s Disease Progression by Protecting the Brain, Study Says.” CNBC, CNBC, 30 July 2024, www.cnbc.com/2024/07/30/novo-nordisk-glp-1-liraglutide-may-slow-alzheimers-progression.html#:~:text=George%20Frey%20%7C%20Reuters-,An%20older%2C%20once%2Ddaily%20drug%20for%20diabetes%20and%20obesity%20from,stage%20trial%20released%20on%20Tuesday.
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Jagielski, David. “Novo Nordisk’s Growth Opportunities Go Far beyond Just Weight Loss and Diabetes.” Yahoo! Finance, Yahoo!, 8 Aug. 2024, finance.yahoo.com/news/novo-nordisks-growth-opportunities-far-131000087.html.
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